Thursday PM July 23rd, 2009

Previously occupied home sales rise for third consecutive month…Number of newly laid-off workers seeking jobless benefits rises; minimum wage rises tomorrow…Enron play hits the stage in UK…

A real estate group’s report says sales of previously occupied homes rose 3.6 per cent from May to June, the third consecutive monthly increase and a sign that a housing recovery is under way in much of the country. The National Association of Realtors says home sales rose to a seasonally adjusted annual rate of 4.89 million last month, from a downwardly revised pace of 4.72 million in May. It was the highest level of sales since October 2008 and beat economists’ expectations. Sales had been expected to rise to an annual pace of 4.84 million units, according to Thomson Reuters. The median sales price was $181,800 in June down 15.4 per cent from $215,000 in the same month last year, but up from $174,700 in may.

Commercial real estate values have dropped 35 per cent around the country from their October 2007 peak, according to Moody’s REAL Commercial Property Price Index, as reported by the Houston Business Journal. The report says the decline appears to be accelerating. The index measuring apartments fell 16 per cent, compared to a year ago. Industrial properties fell 12 per cent. Offices dropped almost 29 per cent. Retail is down 18.5 per cent.

The government says the number of newly laid-off workers seeking jobless benefits rose last week, though the report was distorted by the timing of auto plant shutdowns. The Labor Department says its tally of initial claims for unemployment insurance rose by 30,000 to a seasonally adjusted 554,000. That’s above analysts’ estimates of 550,000. But the total jobless benefit rolls fell by 88,000 to 6.2 million, the lowest level since mid-April. A department analyst says the government’s seasonal adjustment process expected a sharp drop in claims last week, which didn’t happen. As a result, seasonally-adjusted claims rose.

Retail gasoline prices dropped an average three cents across Texas this week. AAA Texas reports the average price at the pump was $2.31 a gallon. The nationwide cost for gasoline also declined by three cents, to settle at $2.46. Houston, Fort Worth and Amarillo had the cheapest gasoline this week, at $2.28 a gallon. El Paso gasoline prices were the highest statewide, averaging $2.45. The association says Texas gasoline prices have tumbled by more than 20 cents over the last month. But the organization says the drop in gasoline prices has slowed during the last week, with the price of oil on world markets increasing.

Labor Secretary Hilda Solis says this week’s increase in the minimum wage will generate an extra $5.5 billion in consumer spending over the next year. The federal minimum wage increases by 11 per cent, from $6.55 to $7.25 an hour. It’s the third and final step of a three-year phased increase in the rate. Congress boosted the minimum wage from $5.15 to $5.85 an hour in 2007 and it rose to $6.55 an hour last year. The latest change will benefit workers in 30 states where the state minimum wage is now at or below the federal minimum wage, or there is no state minimum wage.

Microsoft says it is now sending computer makers the final programming code for Windows 7, its new operating system. That indicates Windows 7 is on track to go on sale as expected on October 22nd. It will come with new PCs from then on, and will be available for people to buy separately and install on their existing machines. Microsoft says Windows 7 will be easier to use. The company also promises that switching to it will be smoother than the transition to the previous version, Vista.

A review of the British play Enron appears in the Guardian newspaper. Lucy Prebble’s play is being staged at the Minerva in Chichester, with plans to go on tour after August 29th. Prebble’s play makes Jeffrey Skilling the prime mover and principal villain, rather than founder Ken Lay. The review says the production has “breathtaking designs,” and praises Samuel West’s “fine performance” as Skilling, who “combines brilliance and stupidity and grows from a nerdy ordinariness into a tycoon through the idea that future income can be written down as earnings the moment a deal is signed.” The paper calls the play “a fantastical theatrical event.”


Ford says it posted a surprise second-quarter profit of $2.3 billion due mainly to a huge gain for debt reduction. The profit is a vast improvement from the record $8.7 billion loss that ford reported in the same quarter last year. But the latest profit comes because of a $3.4 billion gain due to debt reduction. In March Ford swapped stock and cash to reduce its loan and bond debt by $7.7 billion. Without special items, Ford would have lost $424 million.

AT&T says its earnings fell 15 per cent in the second quarter as it subsidized a record-setting launch of a new iPhone model. The weak economy also continued to sap its landline business. The profit beat wall street estimates, however. The country’s largest telecommunications provider said it earned $3.20 billion in the April to June period. That’s down from $3.77 billion a year earlier. AT&T’s revenue fell 0.6 per cent to $30.7 billion, matching analyst expectations. AT&T activated more than 2.4 million iPhones in the quarter, and more than a third of those activations for customers who were new to the carrier.

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