Consumers and businesses may finally be seeing some relief from rising utility bills, thanks to the biggest decline in U.S. electricity demand in decades. Power consumption fell 1.6 per cent last year and government forecasters see it falling another 2.7 per cent this year. That would mark the first time since 1949 that the nation has seen energy demand fall in consecutive years. Prices on wholesale markets are expected to decline for the rest of 2009, according to the Energy Information Agency. The decline in power usage is an indication of how badly the recession has jolted the economy and changed the way Americans spend. The recession has suppressed demand for coal, natural gas and oil. This has sent a ripple through wholesale electric markets, where fossil fuels are turned into energy. The weather is helping as well. It was a mild summer in which it made more sense to open windows than crank up the air conditioning. And most forecasters expect a relatively warm winter. Rates are expected to begin edging up again next year.
Despite the nation’s highest jobless rate in 26 years, American workers are seeing some encouraging trends, according to a report released by Rutgers University. In its second National Labor Scorecard, the Rutgers School of Management and Labor Relations said that for workers still collecting a paycheck, the average inflation-adjusted wages have actually increased and wage gaps for women and minorities have declined. Average inflation-adjusted earnings rose five per cent from 2008 for non-supervisory workers, and median earnings for all wage and salary workers increased three per cent. Still, the jobless rate continues to rise. The Labor Department last week said the unemployment rate jumped to 9.7 per cent in August, the highest since 1983. According to the study, nearly 17 per cent of Americans are unemployed, discouraged from seeking work or underemployed. That’s up from ten per cent last year. Some workers are adjusting by taking part-time jobs. According to the study, nearly 20 per cent of workers have part-time jobs.
The Federal Reserve says consumers slashed their borrowing in July by the largest amount on record as job losses and uncertainty about the economic recovery prompted Americans to rein in their debt. Consumers ratcheted back their credit by a larger-than-anticipated $21.6 billion from June, the most on records dating to 1943. Economists expected credit to drop by $4 billion. July’s retreat translated into an annualized drop of 10.4 per cent. That was even sharper than the 7.4 per cent annualized decline in June and the deepest cut since a 16.3 per cent pace in June 1975.
A world economic forum poll finds the United States is no longer the world’s most competitive economy. The financial crisis and accumulated deficits have dropped the U.S. to number two behind Switzerland in a poll of over 13,000 business leaders conducted by the Geneva-based forum. Singapore is third and Sweden comes in fourth. The forum says Switzerland has overtaken the U.S. because its economic performance has been “relatively stable.” Pollsters asked business figures to rate 133 countries on good government; transport and telecommunications infrastructure; openness to innovation; intellectual property protection; and availability of talent.
Saudi Arabia’s oil minister says global crude markets are “in good shape,” signaling that OPEC probably won’t change its production levels at this week’s meeting in Vienna. Ali Naimi told reporters on the eve of Wednesday’s meeting that the price of oil “is good for everybody: consumers and producers.” Oil has been hovering around $68 a barrel. Saudi Arabia is the top producer and most influential member of the Organization of Petroleum Exporting Countries, and the other 11 cartel members tend to follow its lead. Analysts have said they don’t expect OPEC to cut its current production quota of just under 25 million barrels a day. Kuwait’s oil minister also signaled Tuesday that he doesn’t expect the output target to change this week.
Snider Tire and Michelin Retread Technologies have opened a new retreading plant in Houston near George Bush Intercontinental Airport, according to the Houston Business Journal. The plant on Northpark Central will help supply Snider’s four Texas commercial locations with retreaded tires. North Carolina-based Snider Tire has a commercial truck tire service center nearly 610 East and I-10.
Valero Energy says it’s closing a portion of a Delaware refinery and laying off 150 employees and 100 contract workers until economic conditions improve. The San Antonio-based company blamed the recession for the unprofitable performance of the coker and gasifier complex at the Delaware City refinery. The coker operation will be closed until economics improve. Valero said the gasifier complex will be closed indefinitely. Valero, the nation’s largest independent refiner, in July said it could lose money for the rest of the year if the weak economy persists.
Airline passengers got to their destination on time a little more often in July. The Transportation Department says 77.6 per cent of airline flights arrived on time that month. That’s up from 75.7 per cent during the same month last year. And it was an improvement over the 76.1 per cent on-time rate in June. Airlines have generally been flying less because of the recession, and that seems to be helping them get their remaining flights to their destinations on time. Southwest Airlines had the top on-time arrival rating of the biggest carriers, followed by US Airways and United. American was last-place among the major carriers.
Meanwhile, Continental Airlines tied Alaska Airlines as carriers with the lowest rate of canceled domestic flights, with a rate of 0.4 per cent in July. But Continental took the second and third spots on the list of longest tarmac delays.
Government agencies are finding one benefit in the recession: it’s costing less–and sometime far less–to build everything from schools to roads. Agencies nationwide say that they’re seeing more bids than in the past for all sorts of projects, and that they’re coming in below their estimates. New Jersey has contracted out four school construction projects this year. The winning bids have fallen far below state engineers’ estimates. Across the country, road agencies are finding the same thing, and that’s allowing them to repave more miles and paint more bridges. Experts say the low bids reflect lower prices for construction materials and more competition among contractors angling to find work when it’s scarce.
The poor economy has led to a surge in student interest at schools that provide an education in the business and science of death. The funeral science field historically garners greater interest as the job market worsens. It’s not an easy or particularly lucrative way to make a living. Every day, morticians and their assistants remove bodily fluids, fill in crow’s feet on cadavers and fluff hair on balding corpses. Also, they must counsel grieving families and prepare the bodies of children. And for that, funeral directors pull in an average of $58,810, according to the latest estimates in May 2008 from the Bureau of Labor Statistics. Still, for many, the promise of a stable job is worth it. Stephanie Kann, program director at the Worsham College of Mortuary Science in Illinois, says interest in mortuary science historically has spiked when the unemployment rate hits eight per cent. It saw a 20 per cent increase this year over last.
The slow economy has many homeowners retrofitting improvements, and that’s helping companies like Houston-based SpaceMan Home & Office. The firm jumped to 27 for outstanding sales growth performance in the annual Wood 100 report. SpaceMan Home & Office designs, manufactures and installs closet, home office, wall beds and garage systems. The report profiles and ranks 100 fast-growing woodworking companies in North America in Wood and Wood Products magazine.
BP is distributing 260 gasoline-powered generators to every municipality in Galveston County. BP says the additional generators will help support Texas City and Galveston County in the aftermath of a hurricane. The company is also reminding people about the importance of generator use safety. Some of the generators are being earmarked by the communities to help residents who require electricity to sustain their medical equipment. Generators are also going to some social service organizations, such as Mainland Communities United Way, Salvation Army in Galveston and Texas City, Catholic Charities, Interfaith Caring Ministries in Santa Fe and others.
After a rush of economic data last week, the markets get a bit of a break on reports in the coming days. The Federal Reserve’s regional economic roundup, known as the Beige Book, is due Wednesday. That’s ahead of the upcoming policy-setting session. New jobless claims and the July trade balance loom on Thursday. Wholesale inventories and the treasury budget statement are due Friday, rounding out the week.