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Wednesday PM October 28th, 2009

Most metro areas register higher unemployment rates; Houston's unemployment rate hovers at about 8.5 per cent…GMAC Financial Services considers third injection of taxpayer aid…Soon-to-expire tax credit for first-time homeowners affecting sales of new homes…


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Unemployment rates were higher in September than a year earlier in almost all measured metropolitan areas, according to the U.S. Bureau of Labor Statistics. Thirteen of 372 metro areas recorded jobless rates of at least 15 per cent. Twelve areas registered rates below five per cent. The national unemployment rate was 9.5 per cent compared to six per cent a year earlier. The Houston area is registering around 241,500 unemployed, or about 8.5 per cent of the workforce.

Legislation to extend unemployment benefits for out-of-work Americans has cleared a procedural hurdle in the Senate. Senate Democrats, saying that 7,000 people a day are exhausting their benefits, called on their colleagues to move quickly to a final vote. Republicans insisted they get a chance to offer amendments. The vote was 87-13 to bring the bill to the floor, easily eclipsing the 60 votes necessary to advance the measure. The legislation would provide 14 weeks in extra financial aid for everyone exhausting their benefits by the end of the year. People living in 27 states where the unemployment rate is at least 8.5 per cent would get another six weeks on top of the 14. The White House issued a statement in support of extending benefits.

The Texas Department of Public Safety will hire more employees to help trim a backlog of computer-related investigations. A statement from DPS says the goal is to decrease the time it takes to conduct forensic computer examinations, especially involving alleged child pornography. DPS will buy more workstations with specialized forensic examination software, plus streamline how computers are searched during the initial examination phase. The agency’s crime lab in Austin is the only DPS lab that does the specialized examination. DPS as of Wednesday had 45 computer forensic cases pending.

A Treasury Department spokesman confirms GMAC Financial Services is in talks with the Treasury Department for a third injection of taxpayer aid. The auto lender faces a November deadline to raise an $11.5 billion cushion mandated by results of the government’s “stress test” earlier this year. Of the 19 banks that underwent the stress tests, ten were determined to be undercapitalized. GMAC is the only one that couldn’t raise all of its necessary capital from investors. Citing unnamed people familiar with the matter, the Wall Street Journal reports that the U.S. government could hand over up to $5.6 billion. The move would make GMAC the only U.S. firm to receive three rounds of bailout aid. The government holds a 35 per cent equity stake in GMAC after providing $12.5 billion in aid.

Sales of new homes dropped unexpectedly last month as the effects of a soon-to-expire tax credit for first-time owners started to wane. The Commerce Department says sales fell 3.6 per cent to a seasonally adjusted annual rate of 402,000 from a downwardly revised 417,000 in August. Economists surveyed by Thomson Reuters had expected a pace of 440,000. It was the first decline since March. Sales in September were down 7.8 per cent from a year ago. The median sales price of $204,800 was off 9.1 per cent from $225,200 a year earlier, but up 2.5 per cent from August’s level of $199,900.

New home sales are up eight per cent in Cinco Ranch and 12 per cent in Telfair in the first nine months of the year, according to Newland Communities. Out-of-town buyers account for a third of new home sales in Cinco Ranch, and local Sugar Land move-up buyers represent half of the new home sales in Telfair.

Orders to U.S. factories for big-ticket manufactured goods rose in September as the biggest jump in demand for machinery in 18 months offset weakness in commercial aircraft and autos. The Commerce Department says orders for durable goods increased one per cent last month, matching economists’ expectations. Excluding transportation, orders rose 0.9 per cent, slightly better than the 0.7 per cent that economists had forecast. The second advance in three months for items expected to last at least three years is a hopeful sign for the manufacturing sector, which has helped lead the early stages of the fledgling economic recovery. But many economists worry that demand could falter in the months ahead as various government stimulus programs wind down.

Reliant Energy is getting $19.9 million to get ready for the advanced capabilities of new “smart” meters that help customers monitor power use. It’s part of $3.4 billion in government support being made available for 100 projects aimed at modernizing the power grid. Centerpoint was awarded $200 million to complete the installation of 2.2 million smart meters and 550 sensors and automated switches to help the self-healing properties of the grid during natural disasters. The $3.4 billion is from the American Reinvestment and Recovery Act, and will be matched by industry funding for a total public-private investment worth over $8 billion.

Towering turbines could be on the horizon for Corpus Christi as a way for homeowners to harness the wind. The city council approved a residential wind energy ordinance. The measure also includes installation of commercial wind turbines within city limits. The rules say the turbines must comply with the Corpus Christi city noise ordinance. Turbines must have a clear distance around them equal to their height. Councilman Mark Scott says a lot of cities are “talking about going green and taking advantage of new technology.”

Many college graduates are choosing to live in urban, high-tech meccas, fueling a resurgence of brainiacs in California, North Carolina and Texas. Census data shows metro areas with high rates of foreclosures, less tech-based economies or increasing unemployment are seeing declines or slower rates of growth in residents with a college degree or higher. They include Cleveland, Los Angeles, Atlanta, Orlando, New Orleans and Detroit. The report shows that Austin; Portland; Charlotte and Raleigh, North Carolina; and Seattle saw large jumps in residents with at least a college degree. Each offers the promise of specialized tech jobs and hip lifestyles. Among other findings: the top five metro areas with the largest gains in residents earning $65,000 and more were Phoenix; Riverside, California; Dallas; Las Vegas and Houston. Median home values ranged from $68,200 in Odessa, to $739,700 in San Jose, California, the only metro area with a median home value above $700,000.

ConocoPhillips says low natural gas prices and thin margins from its gasoline refining business sent its profit tumbling 71 per cent in the third quarter, but the oil company is ramping up production as crude prices jump. The nation’s third-largest oil company said that it made $1.5 billion for the quarter ended September 30th compared with profit of $5.2 billion in the year-ago third quarter when oil and natural gas prices had peaked at record levels. Revenue totaled $41.3 billion, down from $71.4 billion in the year ago quarter.

Fort Worth-based American Airlines says it will close a Kansas City, Missouri, maintenance base next September because reduced flying means less need for such facilities. The company told employees about the move in a letter. Maintenance senior vice president Carmine J. Romano says the closure is “a difficult but important step” to reduce the airline’s maintenance program as it cuts back on flights. American also has major maintenance bases in Tulsa, Oklahoma, and Fort Worth. It has considered closing a base for several years, but held off after expanding its business of working on other airlines’ planes.

Dallas-based Southwest Airlines, a regular advertiser on sports programming, says it has extended its sponsorship of the NBA’s Boston Celtics for the 2009-2010 season. Southwest said that the deal includes signs in the Celtics’ arena and promotions during all home games. One of the Celtics players, Brian Scalabrine, will write about his travel during the season for the airline’s Web site. The airline, which launched service at Boston’s Logan Airport this year, has been a Celtics sponsor for 13 years.

Comerica Bank hosted more than 100 second grade students from HISD’s Poe Elementary School in a “bank learning day,” designed to teach banking basics and money management. It’s part of a larger Comerica financial literacy initiative called Money $ense. Students learn about ATMs and how cash is deposited, stored and dispensed. The day included a chance to explore the bank’s cash vault.

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