March 25, 2023

British Recovery Picks Up, But Still Remains Fragile

The country’s recovery gained momentum in the second quarter as all of Britain’s main industries reported faster growth, government statistics released on Thursday showed. But some economists warned that it was too early to say Britain’s malaise was over.

Gross domestic product grew 0.6 percent in the second quarter, compared with the first three months of the year, when the economy grew 0.3 percent, the Office for National Statistics said on Thursday. Growth spanned the service sector, which accounts for about three-quarters of Britain’s economy, and construction, agricultural and production, which includes manufacturing. It was the first time in three years that all those industries grew at once.

“Growth not only accelerated appreciably but is also becoming more broadly based,” said Howard Archer, an economist at IHS Global Insight. But he also said that “significant economic headwinds persist,” meaning that the economy “will likely remain prone to periodic losses of momentum.”

On Wednesday, data released from the long-suffering euro zone similarly showed improvement. A survey of purchasing managers by the research firm Markit indicated that manufacturers in Germany and France had begun increasing production as demand grew, and evidence indicated that a credit squeeze for consumers was easing. But there, too, the recovery was likely to continue to be fragile despite the positive reports, some economists said.

In Britain, the service sector grew 0.6 percent in the second quarter, construction grew 0.9 percent and agriculture increased 1.1 percent. Production, including manufacturing, grew 0.6 percent, the Office for National Statistics said.

“Firms are feeling upbeat and are capable of expanding,” said John Longworth, director general of the British Chambers of Commerce. “More and more are adopting a ‘have a go’ attitude when it comes to exporting, which is really encouraging, as this will go a long way to driving growth further still.”

The BT Group, the telecommunications company, on Thursday reported fiscal first-quarter earnings that beat some analysts’ forecasts and said the outlook for its business was improving slightly. EasyJet, the low-cost airline, said on Wednesday that its sales rose in the second quarter as it added capacity in Europe.

The economic revival in Britain is also accompanied by a rise in the price of residential property, according to the mortgage provider Halifax, a unit of the Lloyds Banking Group. The value of homes rose 0.6 percent in June to the highest level in almost three years, helped by government measures that help potential home buyers make down payments.

But some economists said Britain’s recovery could start to lose momentum again in the second half. Banks remain reluctant to lend, especially to small and medium-size companies; real wages have barely moved; and inflation continues to exceed the Bank of England’s 2 percent target. A recovery is also closely linked to the strength of the economies of Continental Europe, Britain’s largest export market, and Asia.

Economists and investors are waiting to hear from Mark J. Carney, who took over as governor of the Bank of England this month, about his plans to strengthen the recovery. Mr. Carney is expected to present the central bank’s new policy on offering more guidance in early August, when the latest inflation report will be released.

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Private Sector Added 135,000 Jobs in May, Survey Shows

Private employers added 135,000 jobs in May, the ADP National Employment Report showed on Wednesday, an acceleration from April but missing forecasts for a gain of 165,000. April’s private payrolls were revised down to an increase of 113,000 from the previously reported 119,000.

“The number was weak,” said Mark Zandi, chief economist at Moody’s Analytics, which jointly developed the report.

“The ADP (data) is suggesting instead of job growth stepping up, it’s actually stepping down as we move into the summer months,” Zandi told reporters. “It’s not like we’re falling off a cliff, it just feels like we’re throttling back a little bit.”

The ADP report showed manufacturers shed payrolls in May and a separate report indicated jobs growth in the vast services sector was weak last month, with a gauge of employment at services firms falling to its lowest in close to a year.

The pace of economic growth is expected to cool in the current quarter from the 2.4 percent rate seen in the first three months of the year, partly due to fiscal belt-tightening in Washington.

The goods producing sector cut 3,000 jobs in May, with a drop of 6,000 positions at manufacturing firms, which could be partially due to defense spending cutbacks, Zandi said.

U.S. stocks were lower in morning trade, while Treasury debt prices climbed. The dollar was slightly weaker against a basket of currencies.

Activity in the U.S. services sector picked up slightly in May, with the Institute for Supply Management’s services index edging up to 53.7 last month from 53.1 in April. That topped economists’ expectations for 53.5.

A reading above 50 indicates expansion in the sector. The May reading was still off this year’s peak of 56.0, which was hit in February.

The forward-looking new orders component rose but the employment measure slipped to the lowest level since last July at 50.1 from 52.0.

Even with the lackluster growth, the services industry held up better than its manufacturing counterpart, which contracted in May, according to data from ISM released earlier in the week.

Data on Wednesday added to signs of a slowdown in manufacturing as new orders for factory goods rose in April but not enough to reverse the prior month’s plunge.

In a busy day for economic releases, yet another report showed unit labor costs fell in the first quarter by 4.3 percent, the most in four years, although the reading appeared to be distorted by a shift in employee compensation during the prior period to avoid a tax hike.


The ADP figures come two days ahead of the government’s more comprehensive labor market report, which includes both public and private sector employment.

That report is expected to show job growth increased only slightly, with nonfarm payrolls seen rising by 170,000 compared to the 165,000 seen in April.

Friday’s report will get even more scrutiny than usual with investors trying to gauge when the Federal Reserve may slow its current $85 billion a month bond-buying program, which is aimed at propping up the economic recovery.

“We have been seeing significant differences in ADP and nonfarm payrolls for months but regardless, it still doesn’t suggest that the labor market is strong enough for the Fed to start tapering,” said Andrew Wilkinson, chief economic strategist at Miller Tabak Co.

Since the report was revamped late last year, ADP’s figures have missed the government’s private payrolls numbers by an average 42,000 in either direction, according to High Frequency Economics.

“That 42,000 average miss for the past seven months is better than the 58,000 average in the prior seven months, although seven months of history is not conclusive,” wrote Jim O’Sullivan, High Frequency Economics’ chief U.S. economist.

Nervousness that the Fed may taper bond purchases sooner than had been expected sent fixed 30-year mortgage rates up 17 basis points to average 4.07 percent in the week ended May 31, the Mortgage Bankers Association said.

Last week’s interest rate was the highest since April 2012 and the first time rates have been above 4 percent since early May of last year.

Demand for refinancing was hit hardest by the acceleration in rates, with applications slumping 15.0 percent. The gauge of loan requests for home purchases – a leading indicator of home sales – held up relatively better, falling just 1.6 percent.

(Additional reporting by Angela Moon in New York and Jason Lange and Lucia Mutikani in Washington; Editing by Andrea Ricci)

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Bank of England Raises Outlook for Economy

Mervyn A. King, in his last scheduled news conference before retiring from the central bank in July, said the economy would grow faster and consumer prices would increase slower than anticipated in February.

Britain’s economy could grow by 0.5 percent this quarter after growing 0.3 percent in the first three months of this year, according to the Bank of England. Inflation, meanwhile, could peak at 3.1 percent toward the end of the summer, a lower level than expected earlier.

“There is a welcome change in the economic outlook,” Mr. King said. The “projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago. That is the first time I have been able to say that since before the financial crisis.”

The improved outlook is backed by a string of economic data from the last two months. The value of British homes rose to the highest level in almost three years in April, according to the mortgage lender Halifax. An index measuring business confidence also increased, the services sector grew more than some economists expected in April and industrial output was stronger.

But Mr. King also said that it was “no time to be complacent” because inflation stubbornly remains above the central bank’s target of 2 percent and the labor market is still weak. Threats to a sustained recovery continue to come from outside Britain’s borders, especially from the euro zone, its largest single export market, Mr. King said. The euro zone, of which Britain is not a part, on Wednesday reported its sixth consecutive quarter of economic decline.

Some economists maintained that Mr. King’s outlook was too optimistic. David Kern, chief economist at the British Chambers of Commerce, a business lobby group, forecast that the speed of the recovery would be “somewhat slower than the governor indicated” and that “the grim euro zone data also shows that our exporters will face obstacles over the year ahead.”

Britain has been struggling to generate growth because concern about unemployment and rising consumer prices has cut into the disposable income of consumers. Banks have also been reluctant to lend, and businesses have held back on hiring staff and other investments. The government’s austerity program, which includes a reduction of public pensions, benefits and jobs, has also depressed spending and investment.

Mr. King, who is being replaced in six weeks by Mark Carney of the Bank of Canada, said Wednesday that the Bank of England would have to continue to strike a balance by trying to bring down inflation without hurting the economy. “Attempting to return inflation to target too rapidly would result in even slower growth and higher unemployment,” he said.

Unemployment rose in the first three months of this year and wage increases dropped, according to figures released Wednesday by the Office for National Statistics. Unemployment as calculated by the International Labor Organization rose 15,000 to 2.52 million, for a rate of 7.8 percent.

“Given the challenging economic conditions at the end of last year, it’s unsurprising that we’re now seeing fewer people in work,” said Neil Carberry, director for employment and skills at the Confederation of British Industry, an employers’ group. “What’s encouraging, however, is that economic conditions seem to be improving and that full-time jobs are still being created.

To help the economy recover, the Bank of England left its benchmark interest rate unchanged at 0.5 percent earlier this month. Some economists expect the rate to remain at this record low level for at least another year. Following the slight improvement in the economic outlook, members of the Bank of England’s rate-setting committee could decide to hold off adding economic stimulus by expanding the bank’s bond-purchasing program.

“Recent signs of improvement in the U.K. economy and the modest upward revisions to the G.D.P. growth forecasts suggest that there is perhaps less need for further stimulus by the Bank of England,” said Howard Archer, an economist at IHS Global Insight.

Stephen Castle contributed reporting.

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Ford Profit Rises on Strong North American Sales

Ford, the nation’s second-largest automaker, said its revenue grew 10 percent in the quarter to $35.8 billion, compared with the year-ago period, and its market share continued to increase in the United States.

Despite unsettled economic conditions in international markets, the company reiterated forecasts that its full-year profits would at least match its performance in 2012.

“Our strong first-quarter results provide further proof that our One Ford plan continues to deliver,” said Alan R. Mulally, Ford’s chief executive.

Ford shares closed Tuesday at $13.36, up 2.3 percent and were up slightly in premarket trading. The results were better than analysts had expected, with Ford reporting a pretax profit of $2.1 billion, or 41 cents a share, exceeding forecasts of 37 cents a share, according to Thomson Reuters.

Ford said that strong sales in its core North American market propelled the company to its 15th consecutive profitable quarter. The company’s sales in the United States rose 11 percent in the first three months of this year, compared with a 6 percent increase for the overall industry.

In North America, Ford posted a pretax profit of $2.4 billion, a 14 percent improvement over the same period a year ago. The company said it was the best quarterly performance since it began reporting the region as a separate business unit in 2000.

The company has steadily rebuilt its product lineup in recent years, bringing out new versions of mainstay vehicles like the Explorer SUV and expanding production of smaller, more fuel-efficient cars like the Focus.

But Ford, like most other major automakers, continued to struggle overseas in the first quarter.

The company reported a pretax loss of $462 million in Europe – about triple the $149 million it lost in the region in the first quarter of 2012.

Ford has said it expects to lose up to $2 billion this year in Europe, where weak economic conditions have driven new vehicle sales to their lowest level in decades.

The company is closing a major assembly plant in Belgium, and accelerating other cost cuts in Europe. Ford said the “outlook for the business environment in Europe remains uncertain.”

In South America, Ford reported a pretax loss $218 million, after earning a profit of $54 million in the same period last year. The company said currency issues in Venezuela and Argentina depressed its results, but that it still expected to break even in the region for the entire year.

Results in Asia, where Ford is investing heavily in new factories and products, improved slightly. The company said it earned a pretax profit of $6 million in the region compared with a $95 million loss a year ago.

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Despites Sales Growth, Ericsson Profit Plunges

But shares in Ericsson, based in Stockholm, rose by 0.3 percent through early afternoon trading, to 74.25 krona, as investors focused on underlying operating profits and comments by the chief executive, Hans Vestberg, who said he saw demand for new networks, its most lucrative business, accelerating this year.

In the first three months of the year, 30 percent of Ericsson’s network equipment sales were made to the four big American network operators — Verizon Wireless, ATT Mobility, Sprint and T-Mobile U.S.A. — a record for the Swedish company. Those companies are Verizon Wireless, ATT Mobility, Sprint and T-Mobile U.S.A., which are expanding or planning to expand their mobile broadband networks.

“The networks division is going in the right direction,” said Hakan Wranne, an analyst with Swedbank in Stockholm. “This is being driven of course very much by the U.S market, which is basically the four big customers. That is also a risk.”

Net profit at Ericsson fell to 1.2 billion krona, or $180.7 million, in the three months through March from 8.8 billion krona a year earlier, when profit was inflated by a one-time gain of 7.7 billion krona from the sale of a 50 percent stake in SonyEricsson to Sony.

Sales in the first quarter rose 2 percent, to 52 billion krona, led by a demand in North America and Southeast Asia, where sales rose by 23 percent and 22 percent, respectively. That offset a 34 percent sales decline in China, Japan and South Korea, where the weakening Swedish currency and slowing network investments weighed on results.

Excluding these and other one-time effects, Ericsson’s operating income rose 50 percent in the period to 2.1 billion krona from 1.4 billion krona a year earlier.

Ericsson’s biggest rival, Huawei of China, has been effectively barred from selling equipment to U.S. operators because of national security concerns by American lawmakers — fears the Chinese company says are unfounded. The intense competition between Huawei and Ericsson has turned to Europe, forcing equipment prices and profits lower for both companies.

In the European market, which Ericsson defines to include Russia and some of the former Soviet republics, quarterly sales rose 6.3 percent to 11.9 billion krona.

“What we have been seeing for several years now, particularly in Europe with the modernization and huge swap-outs of networks, is that those contracts have been taken by Ericsson and Huawei at very low margins,” said Mr. Wranne, the analyst.

Mr. Vestberg, the Ericsson chief executive, said in an interview that he expected operators in Europe, North America and parts of Asia, to accelerate their equipment purchases in the second half of this year, as carriers upgrade networks to accommodate the demands of their new Long Term Evolution technology, which delivers the fastest mobile broadband speeds on the market.

Equipment purchases intended to raise the capacity of networks, like replacing routers and updating network software to improve the efficiency of networks, are typically among the most lucrative types of sales for Ericsson.

“You have a new technology push, a roll-out of a lot of coverage, you start upgrading and then you begin putting capacity in the networks,” Mr. Vestberg said. “In the way we are approaching this mobile broadband technology right now, it will have a major impact on our society. And it is definitely being driven by data and networks.”

Weighing on Ericsson’s results was a one-time charge in the quarter of 1.4 billion krona to eliminate jobs for 919 employees in Sweden, or about 5 percent of its domestic work force of roughly 17,200, and the costs of reducing staffing at its global network management business. Its global work force was about 110,000 at the end of last year.

In Latin America, Ericsson’s sales fell 9 percent to 4.4 billion krona in the quarter as operators postponed building new networks amid delays in auctions of radio-frequency spectrum.

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Chinese G.D.P. for First Quarter Shows Signs of Slowdown

HONG KONG — The Chinese economic recovery lost some of its momentum during the first quarter of this year, official data released on Monday showed, surprising analysts who had expected growth to accelerate on the back of ample credit, strong infrastructure spending and firm exports.

The economy expanded by just 7.7 percent during the first three months of the year, compared with a year earlier, short of the 8 percent that economists polled by Reuters had projected, and slower than during the previous three months, when gross domestic product rose 7.9 percent year-on-year.

Industrial output data for March also underlined the fading momentum. Growth dropped to 8.9 percent compared with March 2012, well below expectations.

The spokesman for the Chinese statistics bureau, Sheng Laiyun, played down the shortfall.

“Over all in the first quarter the economy had a steady start and has advanced in a stable way,” Mr. Sheng said at a news conference in Beijing. “Generally, it’s operating within the range of 7.4 percent to 7.9 percent — that is, steady growth.”

China’s industrialization and urbanization would remain powerful engines for relatively rapid growth, Mr. Sheng said.

Analysts had widely expected China’s economy, the world’s second biggest after the United States, to have picked up more steam during the first months of the year, as a tide of credit flowed into the economy, and government-mandated investment in infrastructure projects picked up.

In fact, the growing scale of credit has begun to worry an increasing number of analysts, who warn that the resulting buildup of debt bears substantial risks, including asset price bubbles and potentially destabilizing defaults.

Fitch Ratings last week expressed concerns about the long-term consequences for China’s financial stability over the country’s huge buildup in debt, particularly borrowing by local governments.

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Media Decoder Blog: Spotify, New to Advertising, Says, ‘I’ve Got the Music in Me’

The category of digital music services is getting as crowded as CBGB was when the Ramones played. So the major competitors in the category are spending large sums on advertising campaigns that are meant to generate awareness, consideration and trial.

The newest entrant in the ad club is Spotify, which plans on Monday to start its first campaign aimed at American music lovers. Appropriately, the initial commercial in the campaign is to make its debut on a music reality competition series, “The Voice,” which is returning on Monday night on NBC for its fourth season.

The budget for the first three months of the Spotify effort in the United States, which is being aimed at consumers ages 18 to 40, is estimated at more than $10 million. The campaign, which also includes online ads in addition to commercials, is being created by Droga5 in New York, the first agency of record for Spotify.

The campaign promotes Spotify, which competes against streaming music services like Rdio, Deezer, Mog and Rhapsody, with the theme “For music.”

(What, you were expecting the ads to say, “Against music”?)

The idea is to present Spotify as the champion of music for every moment and mood, whatever the particular genre that gets someone reeling with the feeling or moving and a-grooving. To underline that, the initial commercial, which depicts the fun and energy of a giant concert, has no music whatsoever on the soundtrack.

“It’s been said that the best songs don’t give answers but instead answer questions,” a narrator begins. “So, why? Why can a song change the world?”

“Because music is a force for good, for change, for whatever,” the narrator continues as on screen a concertgoer is body-surfing above an enormous crowd. “Because we were all conceived to a 4/4 beat. Because music cannot be stopped, cannot be contained.”

“Because music makes us scream ‘Koo koo cachoo’ and mean it,” the narrator concludes. “Because music is worth fighting for. Why? Because it’s music.” The commercial ends with the words “Spotify” and “For music” on screen.

The absence of music in the commercial signals that “music is personal; it means something different to everyone,” said Erin Clift, vice president for global marketing and partnerships at the New York office of Spotify.

Globally, Spotify has more than 24 million active users, of whom more than 6 million are paid subscribers. The service began in Sweden and came to this country two years ago.

“Our initial growth was with music enthusiasts,” Ms. Clift said. “We’re looking for that next group ready to experience music in a new way,” she added, which is “a mass, mainstream audience.”

To help achieve that, the campaign depicts Spotify as “the company that gives consumers music for every one of those moments” in life that it makes a difference, Ms. Clift says, seeking to reach potential users on an emotional level.

Subsequent commercials in the campaign also try to make emotional connections through playing up the importance of music while, again, not actually playing any particular song.

In one spot, featuring a man on his daily commute who is wearing headphones, he muses, “I’m back in the place that made you and I us.” The spot declares that Spotify is “for all the songs that remind you of her.”

In another spot, young men and women dancing at a party are having so much fun that they “don’t care that it’s a Tuesday or whose apartment it is.” Spotify, according to the spot, is “for always being able to find a new beat.”

An ad intended to appear online, on display and video networks like AOL, Buzz Media and Videology, echoes the dance commercial, showing two shirtless young men and a young woman performing awkward dance steps. “Because music doesn’t judge,” the headline reads.

Below, the text reads: “Find all the songs you need to get weird. And all the rest.”

Another online ad is centered on a photograph of a young couple about to engage in what looks as if it will be a wet, sloppy kiss. “Because mixtapes still work,” the headline reads.

Below, the text reads: “Find all the songs you need to seal the deal. And all the rest.”

David Droga, creative chairman at Droga5, said the campaign, like music, is “not judgmental.”

“We’re bringing it back to the essence of what makes music great,” he added, offering a “visceral” take on how “it’s bigger than all of us.”

“It’s more than files and devices and platforms,” Mr. Droga said. “It’s about the music.” He called Spotify “a mission brand” and the campaign’s goal is “to get across their values,” he said.

There are plans for additional ads, according to Mr. Droga, in that “this is the start of a much bigger integrated campaign.”

The media planning and buying part of the campaign is being handled by the Starcom division of the Starcom MediaVest Group, which is owned by the Publicis Groupe.

Spotify has “a dual challenge, building a brand and building a business,” said Lisa Weinstein, president for global digital, data and analytics at the Starcom MediaVest Group in Chicago, who is involved in the campaign because of the digital focus of Spotify’s business.

That means Spotify needs to be concerned about consumers at the top of the marketing funnel, she added, referring to the brand image aspects of the campaign, as well as those “lower down the funnel” who are considering becoming paying subscribers.

Spotify has enjoyed “a high growth rate,” Ms. Weinstein said, “but there is still a tremendous opportunity” to grow further by taking advantage of earned media — social platforms like Twitter — and owned media like as well as the paid media in which the campaign will appear.

Spotify is the most recent digital or e-commerce marketer to start advertising in traditional media to reach mainstream consumers. Others include, Rdio, Viggle and Warby Parker.

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Wall Street Shares Inch Higher

Wall Street inched higher on Monday as earlier weakness prompted some buying and investors pushed the Standard Poor’s 500-stock index to its highest intraday level since October 2007.

By midday, the Dow Jones industrial average and the S..P 500 were trading in positive territory, continuing last week’s rally, which took the Dow to record highs. The S.P. 500 is only about 1 percent away from its all-time closing high.

In afternoon trading, the S.P. and the Dow were both up about 0.3 percent, while the Nasdaq composite was 0.1 percent higher.

Wall Street’s “fear gauge” — the CBOE Volatility Index, known as the VIX — dropped 5.5 percent to 11.90, the lowest level since April 2007.

Equities have rallied strongly since the beginning of the year, helped by signs of improvement in the economy, and pullbacks have been short lived as investors look to get into the market.

“There’s real belief in this rally,” said Tim Ghriskey, chief investment officer of Solaris Group in Bedford Hills, N.Y.

“There are lots of investors out there looking for opportunities to put more money to work in equities, and they’re using these little pullbacks we’ve had – and there haven’t been many – as purchasing opportunities.”

In the first three months of the year, the benchmark S.P. has gained nearly 9 percent.

The Dow has climbed 10 percent for the year.

Wall Street had traded slightly lower earlier in the day as Italy’s credit downgrade and disappointing Chinese economic data gave investors a reason to pause.

BlackBerry shares listed in the United States surged 11 percent after American carriers said they would soon begin selling the company’s long-delayed Z10 device. The stock shot up 11.1 percent to $14.51.

Dell shares were up 1.3 percent at $14.34 after the company agreed to give Carl Icahn a closer look at its books. The move came less than a week after the activist investor joined a growing chorus of opposition to plans by the computer maker’s founder, Michael Dell, to take the company private. Monday’s trading was above the take-private offer price of $13.65.

Genworth Financial shares jumped 6.3 percent to $10.46 after a report by Barron’s that the mortgage insurer’s stock could almost double in the next year, boosted by gains in mortgage and healthcare pricing.

In contrast, Dick’s Sporting Goods fell 10 percent to $45.53 after the retailer reported lower-than-expected fourth-quarter results and gave a disappointing forecast.

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Economix Blog: What to Look For in Friday’s Jobs Report



Dollars to doughnuts.

The monthly jobs report usually gets a lot of attention, but the September numbers due on Friday are likely to absorb an outsize amount of oxygen because of the election just over a month away.

Here are some crucial details economists and analysts are likely to be looking for in the report.

One note of caution: The jobs report numbers are volatile and subject to major revisions months or even years afterward, so it’s a good idea not to read too much into any one report, Friday’s included. Last week, in fact, the Labor Department released preliminary revisions to the jobs numbers for the 12 months ended in March 2012 suggesting that the economy added 386,000 more jobs than originally believed.

1. The number of jobs that employers added to their payrolls.

Economists are predicting job growth of 113,000, far below the economy’s long-term trend and too slow to absorb just those coming of age into the labor force.

The pace of job growth the last few months has been somewhat lackluster, with the economy adding an average of 87,000 jobs a month since April, after averaging 226,000 jobs in the first three months of this year.

It’s not clear what accounts for the slowdown; some analysts have attributed it partly to the unusually warm weather last winter, which may have caused employers to hire earlier than usual and so kept them from needing to add workers in the spring.

In any case, if we continue to have the same pace of job growth that we’ve seen so far this year (an average of 139,000 jobs monthly over the course of 2012), it will take nearly three years before the economy regains the number of jobs it had before the recession began in December 2007. We have 3.4 percent fewer jobs today than we did then, even though the number of working-age people has increased.

If we want to close the jobs gap fully — that is, add enough jobs to absorb new entrants to the labor force as well as the already unemployed — it will take more than a decade at this pace.

2. The unemployment rate.

This number refers to the unemployed as a share of Americans who want jobs and are actively looking for work. It excludes people who are out of the work force altogether and who are not applying for jobs.

It always gets a lot of attention, although economists play it down because it is based on a somewhat volatile survey. Economists are forecasting that the unemployment rate will again be 8.1 percent, reflecting the slow job growth.

3. The number of people joining or leaving the labor force.

This is based on the same noisy survey that the unemployment number comes from, and you can expect talk about it on Friday, particularly if the size of the labor force falls.

Usually in a recovery, many who were sitting on the sidelines decide to re-enter the labor force and start looking for work. In August, however, the share of Americans in the labor force fell, which is why the unemployment rate ticked down. (And that’s a bad reason for the unemployment rate to fall; we want it to fall because people who wanted jobs found them, not because people who wanted jobs stopped looking for work.)

We don’t know why the number of people in the labor force declined. It’s possible that more people than usual decided to enroll in school in August. A surprisingly large share of people who dropped out of the labor force in August did so after being employed, as opposed to unemployed.

4. The broader unemployment rate.

This number includes the people who are out of work and looking for a job (the traditional unemployed), as well as two other groups of “shadow unemployed”: people who want to be working full time but can only find part-time work, and people who want to work but are no longer looking because they’ve been discouraged by their prospects. This group is sometimes referred to collectively as the “underemployed.”

This number has bounced around a bit this year, ranging from 14.5 percent to 15.1 percent. It was 14.7 percent in August. If the number goes up, you can expect to hear a lot of commentary about how the economy is worse than everybody thinks.

5. Government payrolls.

While the private sector has been adding jobs for 30 consecutive months, the public sector has been hemorrhaging workers almost every month for roughly the same period. There are fewer government workers today than there were when President Obama took office, because of job losses at the state and local levels. In August, governments at all levels shed 7,000 jobs.

Government job losses are weighing on the economy, since laid off government workers have less money to spend at private sector businesses, causing those businesses to retrench as well.

If the so-called “fiscal cliff,” which includes cutting $109 billion across the board from the federal budget, materializes at the end of this year, we can expect more government layoffs to follow. The Congressional Research Service recently synthesized a group of studies that estimated that the “sequestration” of federal funds would lead to the elimination of direct, indirect and “induced” jobs of 907,000 because of military spending cuts; 34,000 from cuts to the National Institutes of Health budget; 80,500 from cuts to education spending; and 500,000 from cuts to Medicare.

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India’s Economic Expansion Slows in Second Quarter

MUMBAI — India’s growth rate continued to slide in the second quarter of the year, falling to 7.7 percent, the government reported Tuesday.

The report, which was broadly in line with analysts’ expectations, is likely to put further pressure on Indian policy makers to bolster the economy, which has been slowing since early last year, when it hit an annual pace of 9.4 percent.

Indian leaders have said they would like to push the economy to double-digit growth rates in the coming years. But analysts say that goal looks increasingly out of reach because policy makers have not done enough to improve the productivity of the economy in recent years and because industrialized countries, which are big investors in India, are starting to weaken again.

A slowing economy could also help fuel protests of the kind that paralyzed the government this month.

The social activist Anna Hazare ended a hunger strike Sunday after nearly two weeks, when the Indian Parliament agreed to consider his demand for the creation of a new anti-corruption agency.

Slowing growth in mining, manufacturing and construction accounted for most of the slowdown in the three-month period that ended in June. India’s gross domestic product grew at an annual pace of 8.8 percent in the same period a year ago; it grew 7.8 percent in the first three months of this year.

Many independent analysts are now forecasting that the economy will expand 7.5 percent or less in the current fiscal year, which ends in March 2012. That would be a notable decline from the 8.5 percent growth of the previous year. The government has set a target for 8 percent.

The Confederation of Indian Industry, an advocacy group based in New Delhi, said that to bolster growth, the government would have to overhaul the country’s complicated tax system, ease restrictions on manufacturing and allow greater foreign investment in protected industries like retail and insurance.

“Of particular concern is the slowdown in the manufacturing sector,” Chandrajit Banerjee, director general of the Confederation, said in a statement. “It is extremely important that we are able to push for reforms to enable manufacturing sector investment to move ahead.”

The slower growth should, however, help the country in its fight against inflation, which has been hovering around 10 percent for many months.

The Reserve Bank of India has raised its benchmark interest rates 11 times in less than two years in an effort to bring prices under control. It is expected to raise rates again next month, but corporate executives and analysts say it may now have to consider pausing.

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