Friday PM October 22nd, 2010

Texas unemployment rate dips slightly to 8.1…Oversupply causes natural gas prices fall to new year low…Texas food processing plant shuttered over tainted celery allegations awaits separate analysis from FDA…


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The Texas unemployment rate dropped slightly to 8.1 percent in September, fueled by modest job growth. Numbers released by the Texas Workforce Commission indicate the latest unemployment figure, down from 8.3 percent in August, is the lowest rate for the state so far in 2010. Texas added 3,700 new jobs in September and most of those positions were in manufacturing. The state has gained a total of 152,800 jobs since September 2009. Texas Workforce Commissioner Andres Alcantar calls the job growth in manufacturing and other industries encouraging. The state’s lowest metro unemployment rate last month was 5.1 percent in the Midland area. The highest unemployment rate in Texas was in the McAllen-Edinburg-Mission region, at 11.2 percent.

Nearly half of U.S. states reported drops in their unemployment rates last month, the best showing since June. But job creation was weak in most areas of the country. The Labor Department says unemployment fell in 23 states and Washington, D.C., rose in 11 states and was unchanged in 16 during September. The declines were nearly double the number reported by states in the previous month. Still, that did little to boost hiring. A survey of employers found that payrolls decreased in 34 states and increased in only 16 states and Washington, D.C. The unemployment rate can fall even as job creation is slow if workers stop searching for jobs and drop out of the labor force. If they aren’t looking for work, they aren’t counted as unemployed.

Japan says the global economy loses when countries compete to devalue their currencies. The warning comes as top finance officials from the world’s leading economies gather for two days of talks they hope will defuse growing tensions over exchange rates. Japan’s finance minister told reporters that economic “fundamentals should be reflected in foreign exchange rates.” His comments underscore predictions that currency issues will take center stage at the meeting of finance ministers and central bank governors from the Group of 20 rich and emerging nations. The gathering in South Korea comes just two weeks after they failed at a meeting in Washington to iron out differences that have led to fears of a currency war that could trigger another economic downturn.

The U.S. Environmental Protection Agency says it has approved new operating permits for a Texas refinery, the first to get such papers after a battle erupted between the federal agency and state environmental regulators. The EPA says that Flint Hills Resources had received four new permits. The ongoing battle between the EPA and the Texas Commission on Environmental Quality peaked over the summer when the federal agency disapproved the state’s flexible permitting program, essentially overturning the operating papers for some of the nation’s largest refineries. The debate rapidly evolved into a pitched battle over state rights. Governor Rick Perry uses the EPA’s move as an example of the Obama administration meddling in state affairs.

Natural gas prices fell to a new low for the year after the government reported that U.S. supplies grew more than expected last week. The Energy Information Administration gas held in underground storage expanded by 93 billion cubic feet last week, exceeding forecasts. Analysts say natural gas prices will continue to slide toward the end of the year, and that should keep a lid on energy costs this winter for homeowners and businesses. Oil and natural gas supplies have grown this year in the U.S. and that typically weakens prices. Oil, however, has been propped up by a falling dollar that has made crude cheaper for investors holding foreign currency.

A Texas-based military contractor is seeking an appeal before trial begins in a lawsuit filed by Oregon veterans who claim they were exposed to a toxic chemical in Iraq. Attorneys for Kellogg, Brown and Root claim that suing a military contractor raises “unprecedented” legal questions that first should be decided by a higher court. Other federal judges have ruled in KBR’s favor in lawsuits in Indiana and West Virginia, saying their courts lack jurisdiction. But U.S. Magistrate Judge Paul Papak in Portland told attorneys to prepare for trial while he considers the KBR request to have the 9th U.S. Circuit Court of Appeals review his rulings. Oregon Army National Guard veterans sued KBR last year, claiming the company downplayed or disregarded their exposure to hexavalent chromium in Iraq.

Russian prosecutors have filed for a 14-year prison sentence for former oil tycoon Mikhail Khodorkovsky in his second trial. Khodorkovsky is already serving an eight-year sentence for tax evasion and is standing trial on new charges of fraud and embezzling some $27 billion in crude oil. The court is expected to take weeks to deliver a verdict. Khodorkovsky and his business partner Platon Lebedev have rejected the charges as fabricated and politically driven.

On the bottom of the Gulf of Mexico, just 20 miles north of BP’s blown-out well, life appears bountiful despite initial fears that crude could have wiped out many of these delicate deepwater habitats. Scientists are currently in the early stages of studying what effects, if any, BP’s oil spill in April had on the habitats of plankton, fish, crabs and corals. So far, it appears they dodged a bullet –at least in this area. Researchers have not found any immediate damage, but fear there could still be long-term impacts. More research is needed to determine whether oil has had an impact on coral reproduction and its food web.

A Texas food processing plant shuttered over allegations of tainted celery says they are awaiting a separate analysis from the Food and Drug Administration. Attorneys for Sangar Produce & Processing says the company also had an independent lab retesting its San Antonio facility for Listeria. Texas health officials have linked the plant to contaminated celery that sickened at least six people this year, four of whom died. Jason Galvan, an attorney for Sangar, says the state has provided the company no proof linking the cases to the plant. The state ordered a recall of all produce from the plant. An FDA official has told the associated press the recall could be expanded as the agency learns more.

The post office is trying again to get a rate increase. The agency announced that it is appealing the Postal Regulatory Commission’s rejection of its requested increase. The post office had asked for a two-cent increase in January in the price of first class stamps, which now cost 44 cents. Officials say they need the rate increase because of losses caused by a drop in mail volume caused by the weak economy and a shift in communications and bill paying to the internet. The commission rejected the request on September 30th.

The White House says President Barack Obama has discussed American competitiveness and education with Apple co-founder Steve Jobs. The two men also talked about energy independence and how to create jobs. Obama met with jobs after arriving in San Francisco for campaign fundraisers. White House spokesman Robert Gibbs said Obama wanted to meet with jobs.

Honda says nearly a half-million sedans and minivans in the United States are involved in this week’s recall to fix brake fluid leaks. The action, announced earlier, involves the same issue that led Toyota to recall 1.5 million vehicles. Honda says the recall affects 471,820 2005-2007 model year Acura RL sedans and Honda Odyssey minivans from the 2005 to early 2007 model year. Honda says there have been no injuries or accidents tied to the problem. The Japanese automaker told the government that certain types of brake fluid could affect the seal on the brake’s master cylinder and lead to a leak. If the leaks are left unattended, they could cause a spongy feeling in the brake pedal and adversely affect brake performance.

When the wind blows in two Texas Gulf Coast towns and one Louisiana community, red dust sometimes coats lawns, trucks and traffic lights. The dust and nearby red mud lakes make clear the towns are not far–industry-wise–from Hungary, where a red mud reservoir burst earlier this month, unleashing a massive flood of caustic red sludge that killed at least nine people. Many say that disaster is unlikely here. But the U.S. towns have their own concerns. Most pollution comes from the dust left after alumina, which is used to manufacture aluminum, is extracted from bauxite ore. Environmental regulators say the dust is harmless, though there is little research on its health impacts.

An 85-year-old tree breeder from California is behind many of the peaches, plums and other stone fruit Americans find at the supermarket. Over the decades, Floyd Zaiger has worked at his 140-acre property near Modesto to develop disease-resistant root stocks, groundbreaking hybrids and commercial varieties that can be moved across the country and arrive at stores unblemished. Zaiger and his children create new varieties the old-fashioned way, by cross-pollinating his acres of leafy breeding stock and selecting for certain traits. Their best-known variety is a hybrid plum-apricot called a pluot. Besides the U.S., the company has contracts across Europe and in New Zealand, South Africa, Australia, Argentina and Chile.


Schlumberger’s earnings jumped in the third quarter as revenue rose due to increased land-based drilling activity by its customers in the United States and Canada. Schlumberger chairman and CEO Andrew Gould says that work more than offset a sharp sequential decline in the U.S. Gulf of Mexico as the deepwater drilling moratorium took full effect. The Houston drilling services provider also says it had a gain due to a recent acquisition. Its net income soared to $1.73 billion for the period ended September 30th. That’s up from $787 million a year ago. Revenue climbed 26 percent to $6.85 billion, beating Wall Street’s $6.83 billion.

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