Business memo 05/06/02

Monday, May 6, 2002

Fewer Americans filing insurance claims

For a second week in a row, fewer Americans filed new claims for unemployment insurance, suggesting that the budding economic recovery is easing the pace of layoffs.

The Labor Department reported last week that for the work week ending April 27, new claims for jobless benefits dropped by a seasonally adjusted 10,000 to 418,000, the lowest since March 23. The week before, claims dropped by 24,000.

A second report, from the Commerce Department, reinforced the view that manufacturers are making a comeback after sharp production cuts and the loss of hundreds of thousands of jobs during last year's recession.

Orders to factories rose for the fourth straight month, with a solid 0.4 percent gain in March.

House agrees to boost farm spending

The House last week passed an election-year farm bill that will boost spending by 70 percent and increase subsidies to grain and cotton farms while adding thousands of other producers to the federal dole.

President Bush said the legislation wasn't everything he wanted but will "help ensure the immediate and long-term viability of our farm economy." The Senate is expected to vote on the bill Tuesday, Democratic leaders said.

The bill marks the reversal of the market-oriented policy of the 1996 Freedom to Farm law that was supposed to wean farmers from government subsidies.

The bill would authorize $180 billion in spending over the next 10 years, a $73.5 billion increase over existing programs. The legislation provides new payments for everything from milk and lentils to honey and wool.

Southwestern Bell to raise rates in Missouri

Missourians will pay more for call waiting, caller ID and other popular features after a rate increase from SBC Southwestern Bell goes into effect today, thanks to a tie vote on the Missouri Public Service Commission last week.

Rates for basic residential and business service will not change, though some long-distance rates will go up.

Last Tuesday, commissioners deadlocked 2-2 on a proposal that would have delayed the increases. The tie vote means the delay proposal failed, and the increases will go into effect as planned.

Commission chairman Kelvin Simmons and commissioner Steve Gaw voted for a delay, while commissioners Connie Murray and Bryan Forbis voted against it. Commissioner Sheila Lumpe was ill and missed the vote.

Southwestern Bell is not saying how much revenue it expects to add from the price changes.

Add-ons such as call waiting and three-way calling, some operator-assisted services and some long-distance rates, will go up.

A handful of rates, including certain directory service rates and certain bundled service packages, such as "The Works," will go down.

Most affected rates will go up 8 percent, the maximum allowed each year under state regulations that cap phone service prices.

And some rates that no longer fall under the price cap will go up even higher, including some business long-distance rates, which will shoot up 32 to 40 percent.

Southwestern Bell is also changing the way it charges for long distance. Previously, callers paid more the further they were from the call's recipient. Southwestern Bell will now charge a flat rate, meaning some callers will see lower long-distance bills, and others will see higher bills.

Southwestern Bell spokesman Dave Baldridge said the increases will mostly affect customers who order the features individually.

Last week, Missouri's Office of Public Counsel filed a motion asking the commission to block the rate changes and investigate whether they result from a lack of competition.

Southwestern Bell has about 2.7 million lines in Missouri.

-- From staff, wire reports

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