November 18, 2017

Euro Zone Economy Grew 0.3% in 2nd Quarter, Ending Recession

PARIS — Europe broke out of recession in the second quarter of the year, official data showed Wednesday, amid stronger domestic demand in France and Germany, ending a six-quarter downturn that has sapped confidence and thrown millions of people out of work.

The gross domestic product of the 17-nation euro zone grew by 0.3 percent in the April-June period from the previous three months, when the economy contracted by 0.3 percent, according to a report from Eurostat, the statistical agency of the European Union. That was slightly better than the 0.2 percent growth economists had been expecting.

On an annualized basis, the euro zone grew by about 1.2 percent in the second quarter, short of the 1.7 percent second-quarter showing by the United States and 2.6 percent in Japan, but nonetheless a relief to the Continent, which has weathered an unemployment rate that has risen to 12.1 percent and a sovereign debt crisis that raised existential questions about the euro.

The economy of the European Union as a whole, which consists of 28 nations, also grew by 0.3 percent in the second quarter.

Germany grew by 0.7 percent, after stagnating in the first quarter. The gains were led by demand from households and government, the Federal Statistical Office reported from Wiesbaden, while exports and investment also rose. The news bolsters Chancellor Angela Merkel as her coalition government prepares for September elections.

France, which had declined for the two previous quarters, posted 0.5 percent quarterly growth, as household spending grew and companies increased exports of goods and services, though investment declined slightly. Pierre Moscovici, the French finance minister, noted that it was the best showing since the first quarter of 2011, before President François Hollande took office, and hailed the result as justifying the government’s economic policies.

The fact that households in Germany and France helped to drive the rebound “suggests that the recent period of relative calmness in the euro zone is encouraging core consumers to spend money and might raise hopes of a narrowing of the economic imbalances within the currency union,” Jonathan Loynes, an economist in London with Capital Economics, wrote in a research note.

Still, Mr. Loynes wrote, the weaker European economies, particularly those hurt by the sovereign debt crisis, “remain a very long way from the rates of expansion required to address their deep-seated problems of mass unemployment and cripplingly high debt.”

“The recession may be over,” he added, “but the debt crisis is decidedly not.”

Article source: http://www.nytimes.com/2013/08/15/business/global/euro-zone-economy-grew-0-3-in-2nd-quarter-ending-recession.html?partner=rss&emc=rss

China Service Sector Shows Expansion

BEIJING — Activity in China’s service sector defied the cooling of the country’s economy and expanded modestly in July, a private survey showed Monday. New business orders recovered from a multiyear low in a rare sign of resilience.

But that rise was tempered by a decline in prices charged by companies to a nine-month low, suggesting that demand was still too weak for them to raise prices, while business expectations hovered near their lowest level since 2005.

The HSBC/Markit purchasing managers’ index for the service industry stood at 51.3 in July, unchanged from June and just a whisker above a 20-month low of 51.1 struck in April.

It echoed data China’s National Bureau of Statistics had released over the weekend, which showed a reading of 54.1 last month, up from 53.9 in June.

A reading above 50 suggests business has grown from the previous month, while an outcome below 50 points to contraction.

Crucially, service companies are the biggest employers in China, at a time when the government is worried that the downturn could threaten social stability by driving up unemployment as Beijing tries to shift the economy away from a focus on manufacturing.

China’s economy is set to grow this year at its weakest pace since 1990, as flagging foreign and domestic demand weighs on exports and factory production. A slowdown in investment has further dragged on growth.

“China’s service sector has stabilized at a relatively low level of growth,” said Qu Hongbin, an economist at HSBC. “But profit margins continue to be squeezed. Without a sustained improvement in demand, services growth is likely to remain lackluster, putting downside pressures to employment growth.”

The subindex for new orders rebounded to 52.3 from the reading in June, which was the lowest reading in more than four years.

Financial markets have grown increasingly nervous about China’s economic health, despite reassurances from Beijing that it is on track to meet its growth target of 7.5 percent this year.

A pair of P.M.I. surveys of Chinese manufacturers last week showed a contradictory picture of factory production; the official figure was slightly stronger than expected in July among larger Chinese manufacturers, while the HSBC/Markit survey came in at an 11-month low.

“I am more worried about manufacturers. I don’t think the worst is over,” said Zhang Zhiwei, a Nomura economist in Hong Kong.

He said the service sector was holding up better than manufacturing, as it was not saddled with excess capacity and debt and was supported by demand intrinsically less volatile.

“Policy will continue to be tight, and growth will continue to slow in the second half of the year,” Mr. Zhang said.

The HSBC survey showed the employment subindex had slipped in July, although it remained above a four-year trough touched in April.

HSBC said 6 percent of survey respondents had increased their payrolls, with a particular focus on hiring graduates. In contrast, 2 percent of companies had shed jobs.

The service sector accounted for 46 percent of China’s economy in 2012, so a sharp slowdown in the industry would exacerbate concerns about slackening economic growth.

Service firms created 35 percent of all jobs in China in 2011, overtaking manufacturers, who accounted for 30 percent of hiring.

Article source: http://www.nytimes.com/2013/08/06/business/global/china-service-sector-shows-expansion.html?partner=rss&emc=rss

Ray of Light in European Economic Data

FRANKFURT — In what passes for good news in Europe these days, a survey Monday showed that manufacturing in the euro zone was deteriorating more gradually than preliminary estimates had indicated. The slight improvement in economic data fed hope that the euro zone was in a temporary downturn and not stuck in a recession that could last for years.

The data, along with an expression of mild optimism by the president of the European Central Bank, suggested that makers of monetary policy were likely to continue to resist calls for more forceful action to prevent the euro zone from slipping into long-term torpor.

“The economic situation in the euro area remains challenging but there are a few signs of a possible stabilization,” Mario Draghi, the president of the E.C.B., said Monday at a conference in Shanghai. The central bank still expects “a very gradual recovery starting in the latter part of this year,” he said.

The E.C.B. will hold its regular monetary policy meeting on Thursday, but the chances of a rate cut or other action, which were already slim, fell after the release Monday of a survey of purchasing managers by Markit, a data provider. The Markit data pointed to a continued decline in economic activity, but at a slower rate than before.

Despite such tentative signs of improvement, a growing chorus of economists is warning that the euro zone could be facing prolonged stagnation of the kind that has gripped Japan for decades. They have asked the E.C.B. to act more aggressively to stimulate lending to struggling businesses in countries like Spain and Italy. Lack of credit is making it impossible for many businesses to invest in expansion or hire more workers.

“We do think more could be done by the E.C.B” to unlock credit in the struggling countries, Nemat Shafik, deputy managing director of the International Monetary Fund, said at a gathering of economists and policy makers in the northern Italian town of Trento on Sunday, Reuters reported.

The I.M.F. continued to express concern about prospects for the euro zone economy. In a separate report published Monday, the organization said it expected Germany to grow only 0.3 percent this year, half its previous forecast. Recession in the rest of the euro zone has made German businesses reluctant to invest, the I.M.F. said. The organization has forecast that the euro zone as a whole will decline by 0.25 percent this year.

The E.C.B.’s options to stimulate the euro zone economy are limited, however. Last month, the central bank cut the benchmark interest rate to 0.5 percent from 0.75 percent. Most analysts do not expect the rate to fall again this month.

There has also been speculation that the central bank could buy packages of outstanding commercial loans known as asset-backed securities, as a way to push down interest rates. Mr. Draghi has said that the E.C.B. is exploring ways to stimulate the moribund market for asset-backed securities.

However, such unconventional action would risk a split on the E.C.B. governing council between members who would like to effectively print money and conservatives led by the Bundesbank, the German central bank, who fear inflation. That potential dispute has kept the E.C.B. from embarking on the same large-scale intervention as other central banks like the U.S. Federal Reserve and the Bank of England, which bought huge swaths of bonds in an effort to bring down rates and stimulate economic growth, a practice known as quantitative easing.

Mr. Draghi said in Shanghai that there were limits to what the E.C.B. could do to repair troubled economies. He again urged political leaders to remove barriers to hiring and firing and take other steps to promote growth. “It is the responsibility of national governments to eliminate uncertainty about growth and the sustainability of public finances,” Mr. Draghi said.

Germany, under pressure to deploy its economic strength to help its troubled euro zone allies, is considering a program that would funnel €1 billion, or $1.3 billion, in loans to small and medium businesses in Spain, The Associated Press reported, citing a document it had seen.

Germany also faced criticism for holding up progress on a so-called banking union that would centralize bank regulation and establish a way to close ailing banks without burdening taxpayers.

Ahead of national elections this autumn, Chancellor Angela Merkel of Germany is anxious to avoid any appearance that voters might be liable for banking problems in other countries, said Mujtaba Rahman, director for Europe at Eurasia Group, a political risk consultancy.

“Agreement on the two most important political questions — who decides and who pays — is still a long way off,” Mr. Rahman said in a note to clients.

Article source: http://www.nytimes.com/2013/06/04/business/global/04iht-ecb04.html?partner=rss&emc=rss

Off the Charts: Business Investment Rebounds Even as Recovery Drags

The government’s estimate of first-quarter gross domestic product last week indicated the overall economy was only 8.3 percent higher than it was in the second quarter of 2009, the quarter the recession ended. That is significantly weaker than the recoveries that followed the recessions that ended in 1982, 1991 or 2001. After this much time, the economy had grown at least 11.4 percent (after the 2001 downturn) and as much as 21.3 percent (following the 1982 low).

That subpar performance can be traced to two of the three pillars of the American economy — consumers and the government. But the third, business, has made an impressive bounceback.

The accompanying charts cut the economy into three sectors, and show how each of them performed in comparable periods after the previous recessions, as well as this one. All start at the level during the quarter that the National Bureau of Economic Research determined the downturn ended. Together, the three exclude only two contributors to G.D.P. growth — changes in the trade balance and in business inventories.

The business segment consists of private fixed investment in everything from buildings to computers, but excludes residential construction. That is included in the consumer category, which also includes personal consumption expenditures. The government category includes spending by all three levels of government, federal, state and local.

Business investment in the first quarter of this year was 21 percent higher than it had been in the quarter when the economy bottomed. That was not quite as large an increase as followed the 1991 bottom, but it is more rapid than the increases that occurred during the recoveries that began in 1982 and 2001.

Corporations as a group are doing well. Corporate profits, as a percent of G.D.P., rose to record post-World War II levels in 2012, and the effective income tax rate on those profits remains lower than it was in any of the past recoveries, according to government estimates. The government has not yet estimated first-quarter corporate profits.

After past recessions, there has often been an immediate explosion in consumer spending as pent-up demand comes to the fore, and as the housing industry rebounds rapidly. That did not happen this time, in large part because of the nature of the boom in the 2000s, which included excessive investment in houses and consumers taking on debt to support their consumption. The resulting hangover has depressed the recovery in consumer spending to just 8.6 percent after 15 quarters, well below the pace of any of the previous three rebounds.

That is starting to change, however. The pace of growth in nonresidential investment is slowing, but residential investment is starting to take off. And personal consumption expenditures climbed at an annual rate of 3.2 percent in the first quarter, the fastest pace in more than two years.

Whether those gains can continue, as the payroll tax increase and the federal government sequester increase their impact, remains to be seen.

The government sector has been shrinking almost continually since the end of the recession. The decline in state and local government seems to have begun to slow down, but the decline in federal spending appears to be picking up and is likely to continue to be a drag on the American economy.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2013/05/04/business/economy/business-investment-rebounds-even-as-recovery-drags.html?partner=rss&emc=rss

Off the Charts: Survey Shows Americans Are Losing Jobs at Lower Rates

The Labor Department’s Job Openings and Labor Turnover Survey for February showed that during that month the total number of people who were either discharged or laid off totaled just 0.9 percent of all job holders in the United States. It was the first month since that survey began in 2000 that the figure dipped below 1 percent.

Over the most recent 12 months, the Labor Department figures show, only 15.1 percent of workers lost their jobs because of layoffs or discharges. Until this year, the lowest figure for any 12 months had been 15.3 percent, during the period ending in September 2006. That came as the economic boom was cresting before the recession that began at the end of 2007.

As can be seen in the accompanying charts, the rate peaked in the fall of 2009 with 21 percent of jobs being terminated by firing or layoff in the preceding 12 months.

The rate of labor turnover shown by the report is somewhat stunning in the degree of labor turnover that was common before the Great Recession. There is still substantial turnover, but the rate fell sharply during the downturn and has yet to recover to the preceding levels. The hiring rate has been rising steadily since 2009, but remains below any level seen before the recession.

To some extent, the decline in mobility may help to explain the current prevalence of long-term unemployment. Employers who have no need to replace employees who left are not going to hire anyone, making it all the more difficult for unemployed workers to find work.

The department survey asks employers each month how many workers they have and how many left and were added in the preceding month. It also asks how many unfilled jobs the employers have available.

For employees who left, the employers are asked how many were laid off or discharged, and how many quit. In the accompanying chart, the number quitting is combined with the other reasons for departure, which include retirement, transfer and death.

It is, of course, possible that some departures listed as voluntary are at least partly forced. Some workers taking buyouts or early retirement may have concluded they would lose their jobs anyway if they did not do so.

The estimate that 15.1 percent of jobs were terminated by discharge or layoff in the most recent 12 months does not mean that that proportion of the work force was affected over the period. Layoffs are far more prevalent in some industries, notably construction, where the nature of the work may mean that a worker has a series of jobs, losing each one as the job is completed, and is counted as having been laid off several times in any one year.

The charts also show the rates in some industries. In some, including construction, health care and finance, the current rate of firings and layoffs is above the low before the recession. That is also true in government. But in fields like manufacturing, retail trade and accommodation and food services, fewer workers are now being let go than at any time during the boom years early in this century.

Floyd Norris comments on finance and the economy at nytimes.com/economix.

Article source: http://www.nytimes.com/2013/04/13/business/survey-shows-americans-are-losing-jobs-at-lower-rates.html?partner=rss&emc=rss

Dow Ekes Out 8th Consecutive Gain in Otherwise Flat Trading

The stock market meandered on Tuesday, ending the day with little change, although the Dow Jones industrial average crept up to another nominal high.

The Dow, which has risen for eight consecutive trading sessions, added 2.77 points to close at 14,450.06 after wavering between small gains and losses for most of the day.

The broader Standard Poor’s 500-stock index ended down 3.74 points, or 0.2 percent, at 1,552.48. The Nasdaq composite index dropped 10.55 points, or 0.3 percent, to 3,242.32.

Stocks have surged this year as investors became encouraged by a recovery in the housing market and a pickup in hiring. Strong corporate earnings and continuing economic stimulus from the Federal Reserve are also supporting demand for stocks.

The Dow has gained 10.3 percent in 2013. Last week it surpassed its previous nominal high of 14,164.53. The S. P. 500 has risen 8.9 percent this year and is less than one percentage point from its nominal high close of 1,565.15, set in October 2007.

David Bianco, chief United States equity strategist at Deutsche Bank, said the S. P. 500 index would probably maintain its momentum in the coming weeks and surpass its nominal high. Strong first-quarter corporate earnings reports could also push the market higher.

“I wouldn’t be surprised if the market has a typical 5 percent pullback in the summer,” Mr. Bianco said. “But I think we go higher before that happens.”

The last significant downturn for stocks began before the presidential election in November, when the Dow fell 8 percent from Oct. 5 to Nov. 15 on investors’ concerns that a divided government in Washington might not be able to reach a budget deal to avoid sweeping tax increases and deep spending cuts.

Stocks have not had a correction, typically defined as a decline of 10 to 20 percent, since November 2011.

Peter Cardillo, chief market economist at Rockwell Global Capital, was among those saying investors should expect a pause in the market’s advance.

“Nothing goes up forever,” Mr. Cardillo said. “We will be headed for a correction somewhere along the line.”

Merck was the biggest gainer in the Dow, advancing $1.38, or 3.2 percent, to $45.04 after it said that a data safety monitoring board had recommended that a study of its cholesterol drug Vytorin should continue.

Among the stocks on the move, Yum Brands rose 89 cents, or 1.3 percent, to $68.73 after the company, which owns KFC, Pizza Hut and Taco Bell, announced a smaller-than-expected drop in its sales in China for January and February after a food scare over its chicken suppliers.

Diamond Foods slumped $1.71, or 9.7 percent, to $15.89 after the company reported disappointing second-quarter sales and offered an estimate for the rest of the fiscal year that also fell short of Wall Street estimates.

VeriFone Systems gained $1.22, or 6 percent, to $21.68 after the company, a leading maker of terminals for electronic payments, said late Monday that its chief executive would step down after recent stumbles cut the company’s stock price nearly in half.

Costco Wholesale rose $1.31, or 1.3 percent, to $103.75 after reporting that its fiscal second-quarter net income climbed 39 percent. Costco pulled in more money from membership fees, its sales improved and it recorded a large tax benefit. Even without the tax benefit, the results were better than analysts had expected.

Cabela’s, an outdoor retailer, gained $6.75, or 12.5 percent, to $60.65 after it said that it expected its first-quarter profit to exceed market expectations.

In the bond market, interest rates declined for the first time in seven trading sessions. The price of the Treasury’s 10-year note rose 12/32, to 99 27/32, while its yield dropped to 2.02 percent from 2.06 percent late on Monday.

Article source: http://www.nytimes.com/2013/03/13/business/daily-stock-market-activity.html?partner=rss&emc=rss

India’s Slowing Economy Forcing Budget Decisions

But on Thursday, when the current finance minister, Palaniappan Chidambaram, arrives in Parliament, his steps will be heavier, and the mood is likely to be, too. Faced with slowing growth, persistent inflation and sagging investor confidence, India’s government is pinned between conflicting pressures: economists warn that tough steps are needed to avoid long-term fiscal problems, even as political leaders are leery of introducing unpopular measures before important elections this year.

On Wednesday, the government sought to change the pessimistic narrative, as the Finance Ministry released its annual economic survey and projected that economic growth would jump somewhere above 6 percent during the next fiscal year, predicting that the downturn was “more or less over and the economy is looking up.” Some economists were skeptical, given that similar rosy predictions in recent budgets have proved wrong.

“Let me remind you that last year the economic survey spoke of about 7.6 percent projected growth — and what we had was 5 percent growth,” said Ajay Bodke, head of investment strategy and advisory at Prabhudas Lilladher, a Mumbai brokerage. “That is not just a miss but a humongous miss.”

The consequences of the budget plans are especially high because India, once a darling of global investors and an anointed power-in-waiting, is struggling to regain its lost luster.

India’s estimated 5 percent growth rate for the current fiscal year compares with 8 percent in 2010. Ratings agencies have threatened to downgrade the country’s investment rating to “junk” status. Meanwhile, India’s political class has spent more than three years enmeshed in scandals, as a bickering Parliament has accomplished almost nothing.

“It’s a supercritical moment, actually,” said Rajiv Kumar, an economist with the Center for Policy Research in New Delhi. “If you get it right, and this is a budget that can shore up the government’s credibility, they can turn it around.”

For investors and business leaders, the question is whether the government will make tough calls to address the country’s large fiscal and account deficits, curb huge subsidies for diesel fuel and petroleum products, unclog bureaucratic bottlenecks on stalled manufacturing, energy and infrastructure projects and create incentives to entice new investment.

Only a year ago, Pranab Mukherjee, then finance minister, unveiled a budget now regarded by many analysts as a major mistake. Desperate to increase revenues, the government spooked investors by giving broad latitude for tax collectors to pursue multinationals for billions of dollars in new, unexpected taxes. Investment slowed markedly, while investors and political opponents complained that India’s coalition government, led by the Indian National Congress Party, was endangering one of the world’s fastest-growing economies.

“The economy is in a deep crisis at the moment,” said Yashwant Sinha of the opposition Bharatiya Janata Party, a former finance minister, “and I only hope the crisis doesn’t become any deeper with more pre-election sops.”

Mr. Sinha and many independent economists warn that the economy cannot afford a repeat of 2008, when the government was preparing for national elections the following year. Then, the pre-election budget was filled with big spending measures, including pay raises for government workers and the forgiveness of billions of dollars in loans to farmers. The government was easily re-elected in 2009, but the new spending contributed to a fiscal deficit that rose to roughly 6 percent, from about 2 percent the previous year.

Neha Thirani Bagri contributed reporting from Mumbai, India.

Article source: http://www.nytimes.com/2013/02/28/world/asia/indias-budget-comes-at-a-time-of-conflicting-fiscal-and-political-pressures.html?partner=rss&emc=rss

Its Economy Slowed, India Faces Critical Budget Decisions

But on Thursday, when the current finance minister, Palaniappan Chidambaram, arrives in Parliament, his steps will be heavier, and the mood is likely to be, too. Faced with slowing growth, persistent inflation and sagging investor confidence, India’s government is pinned between conflicting pressures: economists warn that tough steps are needed to avoid long-term fiscal problems, even as political leaders are leery of introducing unpopular measures before important elections later this year.

For its part, the government on Wednesday sought to change the pessimistic narrative, as the Finance Ministry released its annual economic survey and projected that economic growth would jump somewhere above 6 percent during the next fiscal year, predicting that the downturn was “more or less over and the economy is looking up.” Some economists were skeptical, given that similar rosy predictions in recent budgets have proved wrong.

“Let me remind you that last year the economic survey spoke of about 7.6 percent projected growth — and what we had was 5 percent growth,” said Ajay Bodke, head of investment strategy and advisory at Prabhudas Lilladher, a Mumbai brokerage. “That is not just a miss but a humongous miss.”

The consequences of the budget plans are especially high because India, once a darling of global investors and an anointed power-in-waiting, is struggling to regain its lost luster.

India’s estimated growth rate for the current fiscal year is 5 percent again, compared with 8 percent in 2010. Ratings agencies have threatened to downgrade the country’s investment rating to “junk” status. Meanwhile, India’s political class has spent more than three years enmeshed in scandals, as a bickering Parliament has accomplished almost nothing.

“It’s a supercritical moment, actually,” said Rajiv Kumar, an economist with the Center for Policy Research, a think tank in New Delhi. “If you get it right, and this is a budget that can shore up the government’s credibility, they can turn it around.”

For investors and business leaders, the question is whether the government will make tough calls to address the country’s large fiscal and account deficits, curb huge subsidies for diesel fuel and petroleum products, unclog bureaucratic bottlenecks on stalled manufacturing, energy and infrastructure projects and create incentives to entice new investment.

Only a year ago, Pranab Mukherjee, then finance minister, unveiled a budget now regarded by many analysts as a major mistake. Desperate to increase revenues, the government spooked investors by giving broad latitude for tax collectors to pursue multinationals for billions of dollars in new, unexpected taxes. Investment slowed markedly, while investors and political opponents complained that India’s coalition government, led by the Indian National Congress Party, was endangering one of the world’s fastest growing economies.

“The economy is in a deep crisis at the moment,” said Yashwant Sinha, a former finance minister with the opposition Bharatiya Janata Party, “and I only hope the crisis doesn’t become any deeper with more pre-election sops.”

Mr. Sinha and many independent economists warn that the economy cannot afford a repeat of 2008, when the government was preparing for national elections the following year. Then, the pre-election budget was filled with big spending measures, including pay raises to government workers and the forgiveness of billions of dollars in loans to farmers. The government was easily re-elected in 2009, but the new spending contributed to a fiscal deficit that rose to roughly 6 percent, from about 2 percent the previous year.

Neha Thirani Bagri contributed from Mumbai.

Article source: http://www.nytimes.com/2013/02/28/world/asia/indias-budget-comes-at-a-time-of-conflicting-fiscal-and-political-pressures.html?partner=rss&emc=rss

Economix Blog: Comparing Recessions and Recoveries

Source: Bureau of Labor Statistics. Source: Bureau of Labor Statistics.

CATHERINE RAMPELL

CATHERINE RAMPELL

Dollars to doughnuts.

The Labor Department delivered some decent news today, reporting that the nation’s employers added 171,000 jobs in October, plus 84,000 more jobs in August and September than initially estimated. The unemployment ticked up a bit to 7.9 percent from 7.8 percent, but that’s because more people decided to join the labor force and so were newly counted as unemployed.

Job gains were widespread across the private sector, led by professional and business services, health care and retail.

But employment still has a long way to go before returning to its prerecession level.

The chart above shows economywide job changes in this last recession and recovery compared with other recent ones; the black line represents the current cycle. Since the downturn began in December 2007, the economy has had a net decline of about 3 percent in its nonfarm payroll jobs. And that does not even account for the fact that the working-age population has continued to grow, meaning that if the economy were healthy we should have more jobs today than we had before the recession.

Getting the economy to 5 percent unemployment within two years — a return to the rate that prevailed when the recession began — would require job growth of closer to 280,000 per month.

There are now 12.3 million workers looking for work who cannot find it. The tally of those who are “underemployed” — that is, adding in those workers who are part time but want to be employed full time, and workers who want to work but are not looking — is an even larger 23 million.

As bad as all these figures are, it’s worth remembering that job markets in the decade following a financial crisis are always terrible. In fact, layoffs were far worse and lasted much longer in the aftermath of the financial crises that struck, for example, Finland and Sweden in 1991 and Spain in 1977, not to mention the United States during the Great Depression.

Article source: http://economix.blogs.nytimes.com/2012/11/02/comparing-recessions-and-recoveries/?partner=rss&emc=rss

A Year of Disappointment for Hollywood

Movies are a cyclical business and analysts say that 2010 benefited mightily from holdover sales for “Avatar,” which was released late in 2009 and became one of the most popular movies of all time. A decline of hundreds of millions of dollars is not catastrophic when weighed against the size of the industry. Over all, North American ticket revenue for 2011 is projected to be about $10.1 billion, according to Hollywood.com, which compiles box-office data.

That is only a 4.5 percent falloff from 2010. But studio executives are alarmed by the downturn nonetheless, in part because the real picture is worse than the raw revenue numbers suggest.

Revenue, for instance, has been propped up by a glut of 3-D films, which cost $3 to $5 more per ticket. Studios made 40 pictures in 3-D in the last 12 months, up from 24 last year, according to BoxOfficeMojo.com, a movie database. Theaters have also continued to increase prices for standard tickets; moviegoers now pay an average of $7.89 each, up 1 percent over last year.

Attendance for 2011 is expected to drop 5.3 percent, to 1.27 billion, continuing a slide. Attendance declined 6 percent in 2010.

Hopes that a group of major releases would supercharge the Christmas box office fizzled over the weekend. Paramount’s “Mission: Impossible — Ghost Protocol” was a solid No. 1, taking in $26.5 million in its second weekend for a total of about $59 million. But “Sherlock Holmes: A Game of Shadows” (Warner Brothers) was a softer-than-expected second, with $17.8 million in ticket sales, lifting its two-week total to $76.6 million.

“Alvin and the Chipmunks: Chipwrecked” (20th Century Fox) continued to struggle in third place, taking in about $13.3 million for a two-week total of $50.3 million. Three heavily promoted new entries had tepid results. “The Girl With the Dragon Tattoo” (Sony), was fourth, taking in $13 million for the weekend and $21.4 million since opening last Wednesday. Steven Spielberg’s “Adventures of Tintin” (Paramount) was fifth with about $9.1 million ($22.3 million since opening last Wednesday). Fox’s “We Bought a Zoo” came in sixth, taking in a lackluster $7.8 million in its opening weekend.

What has gone wrong? Plenty, say studio distribution executives, who point to competition for leisure dollars, particularly among financially pressed young people (the movie industry’s most coveted demographic); too many family movies; and the continued erosion of star power.

One more thing: “You have to go back and look at the content,” said Dan Fellman, president of domestic distribution for Warner Brothers. “Good movies always rise to the occasion. Bad ones, not so much.”

Young people, defined by studios as teenagers and people in their 20s, certainly helped power some of the biggest movies of 2011, including Warner’s “Harry Potter and the Deathly Hallows: Part 2,” the year’s No. 1 release with $381 million in domestic ticket sales. (Paramount’s “Transformers: Dark of the Moon” was second with more than $352 million, and “The Twilight Saga: Breaking Dawn — Part 1” from Summit Entertainment was third with more than $269 million.)

But a spate of smaller movies aimed at younger audiences bombed, including “Prom” from Walt Disney, “Glee: The 3-D Concert Movie” from 20th Century Fox, Warner’s “Sucker Punch,” Lionsgate’s “Conan the Barbarian” and “Your Highness,” a drug-oriented comedy from Universal. The horror genre struggled as an entire category, with lemons like “Fright Night” (DreamWorks Studios), “The Thing” (Universal) and “Priest” (Sony).

“As bad as the economy is for adults, it’s worse for teenagers,” said Phil Contrino, editor of BoxOffice.com, by way of an explanation. “Because they have less disposable income and because they are more plugged in to audience reaction on Facebook and Twitter, the teenage audience is becoming picky,” he added. “That’s a nightmare for studios that are used to pushing lowest-common-denominator films.”

Mr. Fellman said he had seen evidence that younger consumers were choosing other leisure activities over movies.

“There may be a correlation to the recent strength of video game sales,” he said. “You look at a game like the new ‘Call of Duty’ selling $400 million in its first 24 hours and say, ‘What? How is that even possible?’ ”

Article source: http://feeds.nytimes.com/click.phdo?i=533dae552a60a29d8a7c2166e290b1c1