Category Archives: Employment
Import prices down 0.5%…yoy – 2.7%
“In a shocking state of affairs, it would appear the stock market’s wealth effect is not rubbing off on the real economy. The National Federation of Independent Businesses (NFIB) shows 0% of their members planning to hire. One can only presume we need moar QE, moar deficits, and moar wealth effect.
Recovery? 0%!! …”
“Weak U.S. jobs data on Friday confirmed the worst trading week this year for European and U.S. stocks, and now analysts are warning that investors should brace for further trouble ahead as fiscal tightening begins to take its toll.
Friday’s jobs report came in well below expectations, raising concerns that the recovery in the world’s largest economy is weakening. March’s participation rate was at its lowest since 1979, according to the U.S. Bureau of Labor Statistics. Just 88,000 jobs were added to the economy last month, although the unemployment rate fell to 7.6 percent from 7.7 percent in February.
“In the labor market, at least, we see a real risk of even worse news down the line,” Ian Shepherdson, chief economist at Pantheon Macroeconomic Advisors said in a research note on Monday.
Weakening labor demand, not rising layoffs, is the key problem with the U.S. economy, according to Shepherdson. The weakening demand is mostly coming from smaller firms that are below the radar of the Institute for Supply Management (ISM) survey, which reflects national factory activity.
The National Federation of Small Business job survey has done a decent job in foreshadowing movements in payrolls in recent years, according to Shepherdson, and it’s this report—due to be released on Tuesday—that’s warning of troubled waters ahead, he said.
“While actual job creation appears to be rising, plans to create jobs [in March] took a dive, falling 4 points to a net zero percent of small employers who plan to increase total employment. It seems that the stamina for growth is waning,” William C. Dunkelberg, chief economist for the NFIB said in a press release last week.
Looking at the figures, Pantheon’s Shepherdson said there could be a degree of respite in the official employment numbers for the next couple of months, before a distinct change…..”
“The oil and gas extraction industry lost 600 payrolls in March, according to the BLS report out this morning.
“…..”This shows the depth of the recent employment recession – worse than any other post-war recession – and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis,” writes Bill McBride of Calculated Risk.”
Prior 236k, Market Expects 192k, Actual 88k
Unemployment rate: 7.6%
No change in average hourly earnings…..
FUTURES TANK MORE
Prior 236k, Market Expects 192k, Unemployment rate is 7.7%, Market Expects 7.7%
“What a difference a week makes. Since Monday, forecasts for the March jobs report have dimmed, based on weak economic readings that emerged in the past few days.
The March report, which the Labor Departmentwill issue early Friday, has its work cut out for it, coming on the heels of February’s relatively strong performance.
“We’ve seen a very handsome rebound,” in February, said Eric Lascelles, chief economist for RBC Global Asset Management. “But we might be in for a bit of a pause this month….because recent indicators have soured.”
In the second month of 2013, employers added a net 236,000 jobs and the unemployment rate fell to 7.7% from 7.9%. February’s reading was laced with encouraging signals: temporary hiring climbed and other gains were broad-based, not concentrated in stalwart sectors such as health care and education. There also were some red flags — namely, January’s stark revision down to 119,000 jobs from 157,000. But all told, the snapshot was seen by many as a testament to consumer and business resilience amid headwinds including the budget standoff in Washington. That had many economists predicting 200,000 new jobs for the March report.
Expectations were further stirred by recent strong reports on housing and durable-goods orders. Consumer confidence — hammered by the end of the payroll-tax holiday and a February surge in gas prices — began to bounce back toward the end of March. Initial jobless claims continued their steady decline, with the four-week moving average falling mid-month to roughly 341,000.
But the past week ushered in a raft of less-than-inspiring numbers. The Institute for Supply Management’s Manufacturing and Non-Manufacturing Indexes both reflected growth slowing. On Wednesday, ADP’s estimate for 158,000 new jobs in March in the private sector caught many by surprise. And on Thursday, initial jobless claims climbed back to a four-week moving average around 354,000, in effect wiping out the improvement notched earlier in the month.
Those factors, as well as a low employment reading in the ISM’s nonmanufacturing report, have RBC’s Mr. Lascelles expecting a gain of 175,000 jobs tomorrow. The initial jobless claims likely were affected by the calendar — Spring Break and an early Easter — he said, so although the March jobs figure may not be a “magic 200,000-plus,” it should be “a solidly triple-digit hit.”
Credit Suisse analysts on Wednesday lowered their forecast for net jobs to 160,000 from 200,000, citing ADP and the employment sub-index in the ISM non-manufacturing report….”
“Stephen Warner works part-time at a McDonald’s in New York City, earning the legal minimum wage of $7.25 per hour. He hasn’t seen a pay bump since he started six months ago. Depending on how many shifts he gets, he says his take-home pay sometimes comes out to less than $100 for the week.
Hoping for a living wage, the 27-year-old said he plans to protest his own employer on Thursday, and he believes that several of his coworkers will join him.
“While I’m making $7.25, my money can’t take me anywhere. The price of living is going up it seems every day,” Warner, a Bronx resident, said in an interview Wednesday. “I appreciate the opportunity to work. But I want them to consider how much I make and ask [themselves] if they could live off of it.”
Warner has joined a rare fast-food labor campaign called Fast Food Forward. The union- and faith-backed effort drew national attention last November when itspearheaded strikes at several of New York City’s fast-food restaurants, criticizing the likes of Wendy’s, Taco Bell and Burger King for paying wages that workers struggle to live on. Warner’s protest Thursday will be part of what organizers are billing as the campaign’s second and larger wave.
Jonathan Westin, organizing director at New York Communities for Change, a community group closely involved in the campaign, said he expects between 400 and 500 fast-food employees in New York City to take part in Thursday’s one-day strike, or about double the number of those who participated last year. That’s a small fraction of the city’s tens of thousands of such employees, but Westin said the participation may be large enough to disrupt business at some of the affected restaurants.
Westin said many of the workers who plan to protest on Thursday were inspired by the actions of their colleagues last year. And many of those employees, he added, had been inspired by the strikers who walked out of Walmart stores on Black Friday with similar complaints of low wages and a lack of benefits like health care coverage…”
“The number of planned layoffs at U.S. firms fell in March but downsizing by retail companies still helped the first quarter rack up the largest amount of cuts in over a year, a report showed on Thursday.
Employers announced 49,255 planned job cuts last month, down 11 percent from 55,356 in February, according to the report from consultants Challenger, Gray & Christmas.
But March’s layoffs were still up 30 percent from the same time a year ago, the fourth time in the last six months that monthly job cuts have been higher than the year before….”
“The initial jobless claims number is out, and it’s ugly.
Initial jobless claims have spiked by 28K week over week to 385K.
Analysts had expected 353K.
This is the second weak datapoint in a row.
Yesterday we got an ADP report that missed notably….”
Initial Claims: Prior 336k, market expects 338k, actual 357k ….last week’s number was upped to 341k
GDP up 0.4%, market expected up 0.5%
While i’m not an economist or a financial analyst i think it is painfully obvious that a break up of the entire Eurozone could happen virtually overnight.
The chart below shows how Germany is profiting from current economic conditions and why with their iron fist control would not want to change a thing. The question is how long will the rest of Europe stand pain while upstarts like Beppe Grillo capture attention and even possibly control of sovereign nations.
History has shown time and again how upstart leaders like Hitler can rise to power instantaneously when a society is politically frustrated and wanting “Change You Can Believe In “. Just imagine 17 Beppe Grillos across Europe.
Given what just took place in Cyprus it would not be out of the norm for someone to run a campaign based on strengthening the economy, improving unemployment, protecting depositors, and breaking free of an iron fist like Iceland.
4 week average drops a little over 7k….so that’s good
“The current de facto policy of inflating asset bubbles to spark a “wealth effect” is no substitute for policies that make it less burdensome to start new enterprises and hire employees.
The Status Quo is shameless when it comes to hyping the recovery by whatever metric is most positive. Recently, that has been the stock market, but if GDP rises significantly (and recall GDP increases if the government borrows and blows money), then that number is duly trotted out by politicos and Mainstream Media toadies.
If we scrape away this ceaseless perception management, we find that legitimate broadbased prosperity is always based on rising employment and increased purchasing power of wages. The phantom wealth that is conjured by asset bubbles vanishes when the bubbles inevitably pop, leaving all those who borrowed against their ephemeral bubble wealth hapless debt-serfs.
Since very few households own enough productive assets (i.e. financial assets above and beyond the family home equity) to replace earned income (i.e. a job) with unearned income, rising asset yields and prices do little to improve household wealth or income.
Those with investable assets of more than $1 million are labeled “high-net-worth individuals” or HNWIs. There are about 3 million Americans who qualify as HNWIs; roughly 1.8 million Americans own $2 million or more in investable assets. Number of Rich Americans Fell in 2011.
For context, the U.S. has about 307 million residents and about 110 million households. Roughly 112 million people have full-time jobs and about 38 million are self-employed or have part-time jobs.
Recall that thanks to the Federal Reserve’s zero-interest rate policy (ZIRP), $1 million invested in short-term Treasury bonds earns around $10,000 a year in interest–less than a job paying minimum wage. Owning $1 million in stocks that pay a 2.5% dividend yields $25,000 a year in income, considerably less than the median wage of around $35,000. So even $1 million isn’t necessarily generating enough income to replace earned income (wages).
If prosperity ultimately depends on employment and earned income (wages), how are we doing as a nation? Unfortunately, the answer is “terrible.” As a percentage of the population, full-time employment is down. Only 36% of the population has a full-time job.(Charts 1 & 3 were reprinted by permission from mdbriefing.com; charts 2,4 & 5 are courtesy of frequent contributor B.C.):
It is also down on a per capita (per person) basis:
Meanwhile, an increasing percentage of jobs are part-time. When the media reports that the number of those employed has gone up, note they never break down how many of those new jobs were full-time and part-time.
Total civilian employment is also down:
If we adjust GDP for the growth of M2 money supply and population, we find the broadest measure of the U.S. economy is tanking.
As for wages, I have often reprinted this chart by Doug Short: adjusted for official inflation, real wages are down by 7% – 8%.
(Doug recently reported on net worth, which has nominally matched previous levels but adjusted for official inflation is down 12% from its peak: Household Net Worth: The “Real” Story.)
Adjusted for inflation, the median income for the lower 90% of wage earners (138 million people) has been flat since 1970–forty years. Only the top 10% (14 million people) actually gained income, and only the top 5% gained significantly (+90%).
Clearly, current policies are not very employment-positive. We could start by noting that the only way 90% of the populace can buy more goods and services is if the cost of living declines, i.e. deflation…..”
Those that are not in the labor force outnumbered jobs created.
So really we lost 60k jobs.
Why markets celebrate this horrible reality is beyond imagination.
“(MoneyWatch) With job growth still weak in the U.S., another trend poses both an opportunity and a challenge for American workers: The explosion in temporary and part-time employment.
To be sure, such jobs can ameliorate the high unemployment that has plagued the economy since the 2008 financial crisis. Yet labor experts also say that the surge in what they refer to as “contingent” work signifies a historic shift away from the kind of long-term employment that workers once expected and that helped power the rise of the American middle class.
“What’s changed in the last 20 years is that there’s been an unraveling of job security in the labor market, as well as a diminishment of benefit packages and a deterioration of stable, reliable wages and promotion pathways,” said Katherine Stone, a law professor at the University of California, Los Angeles, and labor specialist. “There’s been a really fundamental shift in the nature of employment — it’s a sea change. Whether you’re talking about the expanded use of short-term employees, temporary workers, project workers, contractors or on-call workers, the use of workers who don’t have regular jobs has increased a lot.”
Two new studies highlight the rise of the temp economy. First, job-search company CareerBuilder reported Thursday that 40 percent of employers surveyed plan to hire temp workers in 2013. Of that number, 42 percent of those employers say they hope to make some of those workers permanent, full-time employees. CareerBuilder lists several job categories in which hiring of temps is growing, including sales representatives, office clerks, manufacturing assemblers, nurses, home health aides, truck drivers and office clerks.
Meanwhile, a study by consulting firm Challenger Gray & Christmas found that employers in February said they planned to cut more than 55,000 jobs, with over 21,000 of those slated to come from the financial services industry and a healthy dose from defense contractors and aerospace firms. That represented a 37 percent increase in planned layoffs over the same period last year.
The Bureau of Labor Statistics defines contingent employees as “those who do not have an implicit or explicit contract for ongoing employment.” By contrast, people who don’t continue working because they are, say, returning to school or retiring would not be considered contingent.
Estimates of the number of contingent workers in the U.S. can range widely, depending on how they are defined. But recent data suggest that roughly a third, and perhaps up to 40 percent, of American workers are in part-time, contract or other non-standard jobs. Recruiting firm MBO Partners projects that there will be 23 million contingent workers by 2017, up from roughly 17 million today.
That phenomenon presents problems for workers and society as a whole. Temp and other contingent jobs frequently mean lower wages than those earned by their permanent counterparts, and there are typically no health care or retirement benefits. Lower wages sap people’s purchasing power and limits personal consumption, which in turn discourages companies from hiring and slows economic growth…..”
“After laying off 4,000 Motorola employees last year, representing around 20 percent of the total workforce, Google just announced that it would increase job cuts by a further 10 percent — now representing 1,200 people. The WSJ intercepted an internal email laying out the motivations behind this move.
“Our costs are too high, we’re operating in markets where we’re not competitive and we’re losing money,” said a Motorola spokesperson in the internal email. The business division is still losing a lot of money every quarter and it impacts Google’s bottom line.
Employees in the U.S., China and India will be affected. Since the acquisition, many Google executives have changed position to help run Motorola. But the turnaround hasn’t happened yet.
For Q4 2012, Motorola generated revenues of $1.51 billion, which represents a dip from previous quarters. And the company reported $353 million of GAAP operating loss….”
“Today, nonfarm payrolls blew past expectations. Payrolls added in February amounted to 236,000 versus economists’ predictions of a 165,000 gain.
However, the labor force participation rate ticked down slightly to 63.5 percent from 63.6 percent.
It’s not a big drop in the participation rate, but it is notable because it was accompanied by a substantial decline in the overall size of the labor force.
People reported not in the labor force rose to 89.304 million in February from 89.008 million in January….”