April 3rd., 2009 Unemployment in U.S. Increases to 8.5%, 25-Year High http://www.bloomberg.com/apps/news?pid=20601087&sid=aV3T3USSyJy0&refer=home
April 3 (Bloomberg) -- The U.S. unemployment rate climbed in March to the highest level since 1983 and the economy lost more than 650,000 jobs for a fourth consecutive month, a sign renewed reductions in spending might slow a recovery. The jobless rate increased to 8.5 percent, as forecast, from 8.1 percent in February, the Labor Department said today in Washington. Employers cut 663,000 workers from staff, bringing total losses since the recession began to about 5.1 million, the biggest slump in the postwar era. Evaporating jobs and declining pay mean President Barack Obama’s pledge to create or save 3.5 million jobs through tax cuts and government spending may fall short of what’s needed to revive the world’s largest economy. Federal Reserve Chairman Ben S. Bernanke has conceded joblessness could top 10 percent under a worst-case scenario. “The labor market has gotten worse,” Conrad DeQuadros, senior economist at RDQ Economics LLC in New York, said before the report. “Weak labor-market conditions will result in consumer spending being weak throughout most of 2009.” After the report, stock futures extended gains and the yield on 10- year Treasury notes rose. The job cuts have been spreading from manufacturers such as Johnson Controls Inc. and Dana Holding Corp. to service providers like International Business Machines Corp. and even the U.S. Postal Service. Revisions subtracted 86,000 workers from January payrolls while’s February’s drop of 651,000 was not revised. November 1983 The last time the unemployment rate was at 8.5 percent was in November 1983, when the economy was recovering from the 1981- 82 recession that pushed the rate to almost 11 percent. Then Fed Chairman Paul Volcker boosted interest rates to quell soaring inflation following the 1970s fuel crisis. Payrolls were forecast to drop by 660,000, according to the median of 80 economists surveyed by Bloomberg News. Estimates ranged from losses of 525,000 to 750,000. Forecasts for the jobless rate ranged from 8.2 percent to 8.7 percent. Today’s report showed factory payrolls fell by 161,000 after declining 169,000 in the prior month. Economists forecast a drop of 160,000. The decrease included a loss of 17,500 jobs in auto manufacturing and parts industries. The manufacturing slump that began more than a year ago may intensify should General Motors Corp. be forced into bankruptcy, economists said. As many as 1 million additional auto-industry jobs may be lost and unemployment would climb to 11 percent, said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York. Auto Industry The auto slump has already rippled through the industry. Johnson Controls, a maker of car interiors and batteries, said last month it will shut 10 factories and cut about 4,000 jobs. Dana, the truck-axle manufacturer that exited bankruptcy in 2008, said it will boost its payroll reduction to 5,800 this year, 800 more than previously announced. “We are taking the difficult actions necessary to survive,” Dana’s Chief Executive Officer John Devine said in a March 16 statement. Service industries, which include banks, insurance companies, restaurants and retailers, cut 358,000 workers after a 366,000 decline in February. Financial firms cut payrolls by 43,000, after a 44,000 decrease the prior month. Retail payrolls decreased by 47,800 after a 50,800 drop. Payrolls at builders fell 126,000 after decreasing 107,000, as home construction and sales remain weak. Government payrolls decreased by 5,000 after a gain of 3,000 the prior month. Postal Cuts Among government job cuts that are still on the way, the Postal Service said March 20 it will close six offices and offer early retirement to about 150,000 workers in a bid to cut costs. The population count that happens once every 10 years may limit the damage. The U.S. Census Bureau began hiring 140,000 temporary employees this month to start conducting the 2010 census. They are the first of more than 1.4 million people it will hire over the next year to poll the population. For many Americans, this employment slump has been an unfamiliar experience. Sarah Opple, 42, was fired in February from a sales position at Gaylord Hotels in Chicago after holding a series of jobs in the hospitality industry since she was 17 years old. “It’s more real to me now,” she said in a March 26 interview. “This recession is way more tangible than the others. It makes everyone feel they could be next.” Fewer Hours Employers are also cutting back on hours. The average work week shrank to a record 33.2 hours in March from 33.3. Average weekly hours worked by production workers fell to 39.3 hours from 39.5 hours, while overtime was unchanged at 2.7 hours. That brought average weekly earnings down to $614.20 from $615.05. Workers’ average hourly wages rose 3 cents, or 0.2 percent, to $18.50 from the prior month. Hourly earnings were 3.4 percent higher than March 2008. Since taking office Jan. 20, Obama has enacted a series of measures aimed at stemming the recession. He signed into law a $787 billion stimulus plan on Feb. 17 that included spending on infrastructure projects to boost hiring. The Treasury Department is also moving to repair the damaged financial system and lower record foreclosures, while the Fed is flooding markets with cash to boost borrowing and spending. Bernanke last month said it was “certainly well within the realm of possibility” that unemployment nationwide could rise above 10 percent “for a period.” That’s the assumption being used in a worst-case scenario in tests to determine the health of the banking system, he said. On Mar 6, 4:26 pm, xi <[email protected]> wrote: > My comment: I told some months ago that pace of destruction of work > was constant inUSeconomy, what means that it is into the first phase > of the crisis. Of course, it was true at that time. Unfortunately, > data from former months show that its pace rose one step to put itself > around 650,000 per month. As the article tells “There is not a single > sign that points to a bottom yet”. We are at the left side of the U > yet. > > On the other hand, global economy, in particular in Asia, are showing > early signs of recovery. IfUSeconomy opens itself (less > protectionism and more foreign investments) it could take advantage of > it. > > Peace and best wishes. > > Xi > > Unemployment inU.S.Surges to 8.1% as Payrolls > Slidehttp://www.bloomberg.com/apps/news?pid=20601087&sid=aesonW0og4.Y&refe... > > March 6 (Bloomberg) -- TheU.S.unemploymentratejumped in February > to 8.1 percent, the highest level in more than a quarter century, a > surge likely to send more Americans into bankruptcy and force further > cutbacks in consumer spending. > > Employers eliminated 651,000 jobs, the third straight month that > losses surpassed 600,000 -- the first time that’s happened since the > data began in 1939, Labor Department figures showed today in > Washington. Revisions for the prior two months lopped off an > additional 161,000 positions. > > Tumbling global demand is prompting companies from General Motors > Corp. to Sears Holdings Corp. to step up firings, perpetuating a cycle > of job losses and spending cuts. The Obama administration has set > aside immediate concerns about a budget gap and pushed through a $787 > billion stimulus plan aimed at creating or saving 3.5 million jobs. > > “There is not a single sign that points to a bottom yet,” Ellen > Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in > New York, said before the report. “It is the worst recession in the > postwar era.” > > Treasuries were little changed, while stock-index futures advanced. > Benchmark 10-year note yields were at 2.82 percent at 8:33 a.m. in New > York. Futures on the Standard & Poor’s 500 Stock Index rose 0.4 > percent to 688.60. > > Deeper Declines > > The payroll drop in January was revised up to 655,000 from 598,000 and > December now shows a 681,000 drop, up from the 577,000 previously > estimated. The December decline was the biggest since October 1949. > > TheU.S.economy has now lost almost 4.4 million jobs since the > recession began in December 2007, the biggest employment slump of any > economic downturn in the postwar period. > > Payrolls were forecast to drop by 650,000, according to the median of > 80 economists surveyed by Bloomberg News. Estimates ranged from losses > of 500,000 to 800,000. > > The joblessratewas projected to jump to 7.9 percent. Forecasts > ranged from 7.8 percent to 8.1 percent. > > Today’s report showed factory payrolls fell by 168,000 after declining > 257,000 in the prior month. Economists forecast a drop of 200,000. The > decrease included a loss of 25,300 jobs in producers of machinery and > 27,500 in makers of fabricated metal products. > > Carmakers Shrink > > Automakers, at the heart of the manufacturing slump, continued to > slash jobs and trim costs to stay in business. General Motors last > month said it would cut 47,000 more positions globally while Chrysler > LLC announced 3,000 more layoffs. > > Auto-parts makers are also suffering. Canton, Ohio-based Timken Co., > the supplier of bearings to the world’s top five carmakers, said March > 2 it would eliminate as many as 400 salaried jobs this year. > > Service industries, which include banks, insurance companies, > restaurants and retailers, subtracted 375,000 workers after cutting > 276,000. Financial firms cut payrolls by 44,000, after a 52,000 > decline the prior month. Retail payrolls decreased by 39,500 after a > 38,500 drop. > > Sears last week said it would shutter 24 stores, on top of eight > closings announced earlier, after its fourth-quarter profit fell 55 > percent due to weak holiday sales. > > “This past year was a very difficult year for the world economies and > for retail in the United States, and 2009 needs to be the year of > restoring confidence and trust in our financial system,” Sears > Chairman Edward Lampert said in a letter to shareholders. > > Builders’ Losses > > Payrolls at builders fell by 104,000 after decreasing by 118,000, as > home sales and prices continued to tumble. > > Government payrolls increased by 9,000 after a gain of 31,000 the > prior month, one of the few areas still hiring. Another 26,000 jobs > were added by education and health providers. > > Employers are holding the line on hours. The average work week held at > 33.3 hours in February. Average weekly hours worked by factory workers > dropped to 39.6 hours from 39.8 hours, while overtime also decreased > to 2.6 hours from 2.8 hours. That brought the average weekly earnings > up by $1 to $615.05. > > Workers’ average hourly wages rose 3 cents, or 0.2 percent, to $18.47 > from $18.44 the prior month. Hourly earnings were 3.6 percent higher > than February 2008. Economists surveyed by Bloomberg had forecast a > 0.2 percent increase from January and a 3.8 percent gain for the 12- > month period. > > Bankruptcies Climb > > Bankruptcy filings for individuals and companies surged 37 percent in > February to more than 103,000, according to data compiled by Automated > Access to Court Electronic Records, a service of Jupiter ESources LLC > in Oklahoma City. Slumping sales have caused recent Chapter 11 filings > by retailers such as Everything But Water LLC, the largestU.S. > retailer of women’s swimwear, and Ritz Camera Centers Inc., the > largest chain of camera stores. > > Economists polled by Bloomberg last month forecast consumer spending > will contract through the first six months of this year after sliding > in the last half of 2008. Purchases have not contracted for four > consecutive quarters since records began in 1947. > > If the recession persists through the first half of this year, it > would the longest since the Great Depression. The economy shrank at a > 6.2 percent pace in the fourth quarter of 2008, the weakest > performance since 1982. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "World-thread" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/world-thread?hl=en -~----------~----~----~----~------~----~------~--~---
