NEW YORK (AP) — Gasoline is near the highest it’s ever been for this time of year, just ahead of the Labor Day weekend.
The run-up in oil prices this year, combined with a rash of refining problems throughout the U.S., has boosted pump prices. The national average on Thursday is $3.629 per gallon. Drivers will pay more for gasoline this Sept. 1 than in any other year except 2008, when pump prices hit an average of $3.686.
Prices are rising despite a drop in U.S. gasoline purchases. Americans may be using less, but drivers in developing nations are using more. That’s pushing fuel prices higher around the world.
Benchmark oil rose 4 cents to $88.85 per barrel in New York, while Brent crude lost 15 cents at $114.70 in London.
Monthly Archives: September 2011
GM sales rise 18%, nobody cares
Guess what? I’m still never buying.
DETROIT (Reuters) – General Motors Co (NYSE:GM – News) said on Thursday that its U.S. sales rose 18 percent in August.
Don Johnson, GM’s vice president for U.S. sales, said strong sales of the compact Chevrolet Cruze and SUVs Chevrolet Equinox and GMC Terrain paced the increase.
“We’re carrying good momentum, and we’re cautiously optimistic that we’ll see U.S. economic growth improve in the months ahead,” Johnson said in a GM press statement.
Flagship brand Chevrolet sales increased 16 percent. GMC sales rose the most among the No. 1 automaker’s four brands, gaining 40 percent. Luxury brand Cadillac sales increased only 4 percent.
AT&T anti-trust suit a fresh line in the sand
The lawsuit seeking to block AT&T Inc.’s takeover of T-Mobile USA Inc. shows a more aggressive antitrust stance by the U.S. Justice Department that limits prospects for other big telecommunications deals, antitrust analysts said.
The suit, filed yesterday in Washington federal court, seeks to derail the $39 billion T-Mobile deal, the biggest acquisition announced this year, according to data compiled by Bloomberg. The last transaction the Justice Department challenged whose size even approached the AT&T bid was the 2003 $8.4 billion Oracle Corp.-PeopleSoft Inc. merger.
The T-Mobile deal is the biggest challenged by the Justice Department since it sued in June 2000 to block WorldCom Inc.’s proposed acquisition of Sprint Corp., a deal valued at $152 billion when the companies called off the merger the following month.
With yesterday’s filing, President Barack Obama’s Justice Department departed from its strategy of approving large acquisitions after adding conditions, as it did with Comcast Corp.’s purchase of NBC Universal and Ticketmaster Entertainment Inc.’s merger with Live Nation Inc. Previously, antitrust authorities at the department “backed down,” said Robert Lande, a University of Baltimore law professor.
“They negotiated a compromise,” Lande said. “But this one they said, ‘No, we cannot compromise, this is anticompetitive.’”
Factory ISM reading falls to 50.6
WASHINGTON (Reuters) – U.S. manufacturing unexpectedly grew in August and fewer Americans filed new claims for jobless aid last week, defying a slump in confidence that threatened to push the economy back into recession.
The Institute for Supply Management (ISM) said on Thursday its index of national factory activity ticked down to 50.6 from 50.9 in July. The modest slowdown confounded economists’ expectations for a fall to 48.5.
Any reading below 50 indicates a contraction in the nation’s factory sector.
A separate report from the Labor Department showed initial claims for state unemployment benefits dropped 12,000 to 409,000, showing little sign of a pick-up in layoffs in the wake of declining business and consumer confidence.
“We’ve gotten a few better reads from data, and my general sense is that things aren’t as bad as the headlines read. Companies aren’t seeing dramatic change,” said Tom Porcelli, U.S. economist at RBC Capital Markets in New York.
U.S. stocks erased losses on the manufacturing data, while Treasury debt prices trimmed gains. The dollar rose against a broad basket of currencies.
However, key details of the ISM survey were soft and initial claims remained perched above the 400,000 level usually associated with a stable labor market.
That indicated the pace of economic growth would remain slow, but further reduced the odds of a second recession.
“The net result is a slowdown, disappointing growth for the third quarter but not a recession,” said John Silvia, chief economist at Wells Fargo in Charlotte, North Carolina.
Spring productivity down, labor costs up
WASHINGTON (AP) — Worker productivity fell this spring more quickly than previously estimated while labor costs were rising at a faster clip. Both developments could pose threats to a fragile economic recovery.
The Labor Department reported Thursday that productivity declined at an annual rate of 0.7 percent in the April-June period, a bigger drop than the 0.3 percent decline reported a month ago. Labor costs rose at an annual rate of 3.3 percent, faster than the 2.4 percent increase originally reported.
The changes reflected downward revisions made last week to overall economic growth which showed the economy’s output barely growing in the spring. Declining productivity, if it persists for a prolonged period, would represent a serious economic threat while rising labor costs would cut into corporate profits.
Economists are forecasting that productivity will slow over the next couple of years while labor costs will increase. However, they don’t see these developments as worrisome during the current period of high unemployment and weak income growth.
Retailers report good August, Target old operation revenue up 4.1%
NEW YORK (AP) — Shoppers remained resilient in August despite wild stock market swings and worries about the economy, resulting in what’s winding up to be a respectable back-to-school shopping season for many merchants.
However, the impact of Hurricane Irene, which ploughed through the Carolinas and up the Eastern Seaboard last weekend, hurt business for merchants, particularly clothing retailers. Retailers are still hoping to recoup lost sales in the next few weeks.
As merchants reported their sales results Thursday, Target Corp., Limited Brands Inc., and teen retailer Wet Seal Inc. posted sales gains that beat Wall Street expectations. But there were several stragglers. Gap Inc., which has been struggling with a sales malaise, posted a bigger-than-expected drop. Kohl’s Corp., and J.C. Penney Co. reported unexpected declines.
The results measuring sales at stores open at least a year are considered a key indicator of a retailer’s health.
“Retailers weathered a number of storms to turn into what’s expected to be a solid back-to-school and August selling season,” said Ken Perkins, president of Research Limited LLC. “September will be interesting. The first half should be good but the second half could be sluggish.” He said beyond buying clothing and supplies for their children, families don’t have any “driving reason to spend.”
“If the economy continues to teeter, the vast majority will keep their wallets tight,” he added.
Target’s revenue at stores open at least a year climbed 4.1 percent in August, driven by back-to-school and back-to-college shopping. The results topped Wall Street’s forecast.
Analysts polled by Thomson Reuters predicted a 3.5 percent increase.
Jobless claims fall 12,000
WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits fell last week, showing little sign of a pick-up in layoffs in the wake of a slump in business and consumer confidence.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 409,000, the Labor Department said on Thursday.
While the figure still points to a jobs market struggling to find strength, it remains well short of a recession signal.
“Claims are essentially on a flat trend over the past month after adjusting for strike impacts, providing some comfort that July’s improvement in economic reports was not followed by a deep dive in August,” said Avery Shenfeld, chief economist at CIBC World Markets in Toronto.
U.S. stock index futures pared losses on the jobless claims data, while prices for government debt held at higher levels.
While the claims data has no bearing on August’s nonfarm payrolls count to be released on Friday, it showed no evidence that businesses responded to the recent financial market turmoil by aggressively laying off workers.
Other reports suggested consumers also did not pull back in August. Some top U.S. retailers on Thursday reported better-than-expected sales last month, despite sagging consumer confidence and Hurricane Irene.
Nonfarm employment is expected to have increased 75,000 in August, according to a Reuters survey, dampened by a strike at Verizon Communications. Payrolls rose 117,000 in July.