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Tuesday PM July 20th, 2010

Extension of unemployment benefits winds way through Congress…United and Continental pilots agree on main points of transition agreement…Apache buys BP assets in $7 billion deal…


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A bill to restore unemployment benefits to millions who have been out of work for more than six months has cleared a Senate hurdle. The 60-40 vote came moments after Carte Goodwin, a successor to West Virginia Democrat Robert Byrd, was sworn in. Goodwin was the crucial 60th Senator to defeat a Republican filibuster that has led to a lapse in benefits for 2.5 million people. A battle has raged for months over whether jobless benefits should be financed with additional federal debt as Democrats want or through cuts to other government programs as most Republicans insist. After a final Senate vote, the House will take up the bill Wednesday. President Barack Obama is likely to sign it into law by week’s end.

The unemployment rate fell in most states in June, but that was mainly because many people gave up on their work searches and were no longer counted. The Labor Department says the jobless rate declined in 39 states and Washington, D.C. last month. That’s a slight improvement from May, when 37 states saw their rates decline. Only 21 states saw net job gains in June, the government said. That compared to 41 the previous month and it was the fewest for the year. The decline reflects the layoff of thousands of temporary census workers, who inflated total payrolls in may and then reduced them in June. Still, it’s also a sign that businesses aren’t hiring many new workers. Nationwide, private employers added a net gain of only 83,000 jobs last month.

President Barack Obama is calling on Congress to pass the Paycheck Fairness Act, which he calls a common sense bill to ensure that women get paid as well as men for equal work. The legislation would make it easier for women to sue employers who pay them less than men. The House passed the bill in 2009, but it failed to clear the Senate. Some Republican lawmakers have argued that the bill could aid trial lawyers more than it would help women. The administration’s Equal Pay Enforcement Task Force also recommends that the federal government collect better data from businesses so it can more effectively track wage discrimination in the workplace.

Houston Community College hosts the first of six HCC Partners for Jobs Job Training Fests tomorrow. Professionals from a variety of fields will be available, as well as guidance counselors and financial advisors. HCC’s Dan Arguijo says the event is for those who need to retrain for a new job or to upgrade their current position.

“People can go to see what kinds of jobs are out there in terms of high demand, and how to get the training for these jobs. There’ll be workshops on rebranding yourself, how to enter the workforce again. We have some great human interest stories. We have an electrician who actually wanted to, all his life, be a pastry chef. And all of a sudden he came to HCC, joined our culinary training program, and now he’s placed as a baker at one of the restaurants here in Houston.”

The Job Training Fest is set for ten tomorrow morning at the HCC Spring Branch campus on West Sam Houston Parkway North.

United Airlines and Continental Airlines say they’ve agreed to the main points of a transition agreement with their pilots. Pilots at both airlines are represented by the Air Line Pilots Association, but they have different contracts. The two airlines are aiming to combine by the end of this year, although integrating their workers and operations will take longer. The airlines say that the agreement-in-principle addresses how they will operate during the transition. They’ll still need to work out a final joint contract, and combine their seniority lists. If the deal happens, the combined united would be the biggest airline in the world.

The government says that airlines’ work forces shrank by 2.7 percent in May from a year earlier. It marks the 23rd straight month in which airline employment has declined. U.S. airlines have laid off thousands of workers in the last year as the economy sputtered. They’re also shifting more jobs outside of the U.S. where labor is cheaper. Airlines are hesitant to start hiring despite a better economy, choosing instead to build up cash reserves. The Transportation Department says scheduled passenger airlines employed 377,000 workers in May, 10,500 less than a year earlier. The May figures are the latest available.

Oil from BP’s blown out well is again seeping into the Gulf of Mexico, but this time, more slowly and scientists aren’t convinced the cap that stopped the flow last week is making things worse. The government said Monday that oil was seeping into the Gulf after days of warning that the experimental cap on the oil well could cause more leaks. Despite what at first seemed a setback, though, the federal government declared the development insignificant and is forging ahead with BP’s plan for finally sealing the hole in the ocean floor. Ever since the cap was used to bottle up the oil last week, engineers have been watching underwater cameras and monitoring to see whether the well would hold or spring a new leak.

BP says it is selling several major assets to Apache for $7 billion to help pay the costs from the Gulf of Mexico oil spill. The proceeds will go towards a $20 billion fund to help pay cleanup costs and damages from the spill. BP said in June that it planned to shed as much as $10 billion in assets over the next 12 months. The sale doesn’t include BP’s stake in Prudhoe Bay, countering published reports that said a deal for the Alaska field was in the works.

Two former Interior Secretaries told Congress they did not anticipate an accident as large as the BP oil spill in the Gulf of Mexico. But Gale Norton and Dirk Kempthorne say no one else did either–including members of Congress who are now blaming the Bush administration for failing to prevent the tragedy. Kempthorne, who served as Interior Secretary from 2006 to January 2009, while George W. bush was president, said he did not recall being asked at his confirmation hearing or in later Congressional testimony about major oil spills.

Home construction plunged last month to the lowest level since October as the economy remained weak and demand for housing plummeted. The Commerce Department says construction of new homes and apartments in June fell five percent from a month earlier to a seasonally adjusted annual rate of 549,000. May’s figure was revised downward to 578,000. The results were driven by a more than 20 percent decline in the volatile condominium and apartment market. However, building permit applications, a sign of future activity, rose 2.1 percent from a month earlier to an annual rate of 586,000. The slumping job market and competition from foreclosed properties have forced builders to limit construction, especially after tax credits that spurred sales expired at the end of April.

The number of people dropping out of the Obama administration’s program main program to help those at risk of losing their homes outstripped those who received aid for the second-straight month. The Treasury Department says about 530,000 borrowers have dropped out of the program as of last month. That’s more than 40 percent of the nearly 1.3 million enrolled since March 2009. It’s a sign that foreclosures could rise and weaken an ailing housing market. Treasury officials say few of these borrowers will wind up in foreclosure. But many analysts still fear a new wave of foreclosures will weaken the housing market. Another 390,000 homeowners, or 30 percent of those who started the program, have received permanent loan modifications and are making payments on time.

Filling up at the pump is costing you less and that trend is expected to continue through the summer. AAA, Wright Express and the Oil Price Information Service say the average price for regular unleaded gas is $2.722 a gallon. That’s down about seven-tenths of one cent from a month ago but about a quarter higher than a year ago. In its weekly report, the Energy Department also said pump prices around the country averaged $2.722 a gallon. It says California drivers are still paying the most, averaging $3.13 a gallon. Gulf coast gas stations had the lowest prices at an average of $2.555 a gallon. Analysts say demand has been fairly weak for the summer driving season, as consumers hold on to their cash in the uncertain economy. With plenty of supply, that should lead to lower prices at the pump.

President Barack Obama wants government workers to play a greener role by cutting business travel and reducing the use of cars for commuting. The White House hopes to reduce carbon dioxide and other greenhouse gas emissions from indirect sources by 13 percent in 2020, compared with 2008 levels. Earlier this year Obama directed agencies to reduce pollution from direct sources, such as buildings and government fleets, by 28 percent. The White House says the federal government is the largest energy consumer in the U.S. economy, and the combined reductions would be the equivalent of removing emissions from 235 million barrels of oil. Employee travel and commuting account for the biggest category of what the White House calls indirect sources of pollution.

Christmas is such a key season for retailers that some are already trying to get consumers in the gift-giving mood. Sears, Kmart and Toys R Us are bringing back Christmas in July promotions that did well last year. Target will hold a one-day online sale starting Friday on 500 items from clothing to Blu-Ray disc players. They’ll be offering discounts not usually seen until after Thanksgiving. But the chief marketing officer at J.C. Penney says a lot of people don’t like it when you push Christmas too early. One retail analyst says encouraging Christmas buying now steals from back-to-school shopping.

A lawmaker in Congress is prodding the Federal Reserve to provide more protection so that credit card users don’t get socked by exorbitant interest rates when they fall behind on their payments. New York Senator Charles Schumer says “credit card companies can still double or triple the Interest rate when a consumer falls two months behind on payments” despite new Fed rules. Schumer wants the Fed to alter the rules, which take effect August 22nd, to prevent big rate hikes under such circumstances. If the Fed doesn’t act, Schumer says he’ll seek legislation to compel the Fed to do so. Congress directed the Fed to implement the new rules in a sweeping law enacted last year.

Federal regulators have concluded that the broadband market is not bringing high-speed Internet connections to all Americans quickly enough. The Federal Communications Commission says broadband is not being made available to all Americans in “a reasonable and timely fashion.” Although the report is the FCC’s sixth inquiry into the state of broadband since Congress mandated in 1996 that it start tracking high-speed Internet connections, it marks the first time that the agency has concluded the market is not working in all corners of the country. The FCC’s national broadband plan, released in March, found that between 14 and 24 million Americans do not have access to broadband.

U.S. consumers and businesses are going to get more options in wireless service starting next year, with the launch of a new wireless broadband network that will provide competition to the incumbent phone companies. Private-equity firm Harbinger Capital Partners revealed details of the launch of its wireless network, LightSquared, which aims to cover 92 percent of the population by 2015. It’s a rare new entrant in the wireless market. LightSquared plans to start providing service in the second half of 2011 in Las Vegas, Phoenix, Denver and Baltimore.

A key advertising forecaster sees global ad spending rising by 3.5 percent to $447.5 billion this year. That’s up from the 2.2 percent that Zenith Optimedia had expected in April and the third upward revision in a row. Zenith says advertising spending came in stronger than expected in the first half of the year in all regions, but especially in North America and Western Europe. The debt crisis in Europe and the U.S. unemployment hasn’t put much of a dent in ad spending, as consumer confidence and spending recovered. Greece and Spain were notable exceptions, where ad spending is forecast to fall by 13.9 percent and 0.7 percent, respectively. In Monday’s report, Zenith said Internet ads are projected to increase the most, up 13 percent in 2010.

A court-appointed official in the messy Texas Rangers bankruptcy case says the team’s August 4th auction should be delayed. The restructuring officer, William K. Snyder, testified that potential buyers probably wouldn’t be able to secure financing by that time. Interested bidders have to come up with at least $500 million. Snyder suggested that a mediator pick the date after talking to all potential bidders. The hearing is the latest twist in the long-delayed sale of the team. Major League Baseball months ago endorsed a group led by Hall of Fame pitcher and Rangers President Nolan Ryan and sports attorney Chuck Greenberg as the best buyer. Angry creditors said the $575 million bid wasn’t the highest, so the judge set up an auction. The bidding procedures set the Greenberg-Ryan group’s offer as the opening bid, but their financing guarantee is set to expire August 12th.

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