April 25, 2024

You are here: Home / Archives for jobless rate

News Analysis: Jobless Numbers Spur Competing Political Narratives

December 3, 2011 by Leave a Comment

Within minutes of the government’s announcement that the jobless rate had declined to 8.6 percent in November from 9 percent a month earlier, Mitt Romney blasted out a statement noting that unemployment had remained above 8 percent throughout the 34 months of President Obama’s tenure in office, “the longest such spell since the Great Depression.”

Making no mention that the jobless rate is now down 1.5 percentage points from its peak two years ago, Mr. Romney added: “The Obama administration may have come to accept such a high level of joblessness as the new normal. I will never accept it.”

A few hours later, the president cited the growth in jobs without ever mentioning the level of unemployment. “Despite some strong headwinds this year, the American economy has now created, in the private sector, jobs for the past 21 months in a row,” Mr. Obama said, appearing in Washington alongside former President Bill Clinton, as good a visual symbol as any of prosperity under a Democratic administration.

The differing responses highlight a big question as the primary seasons draws near: Which is more politically powerful, a positive trend in job growth or the absolute level of unemployment?

The ability of the two parties to persuade voters to look at the situation their way — for Democrats, that the country is making progress and the economic medicine is working, for Republicans that no incremental improvements can eradicate the failure of Mr. Obama’s economic leadership — is now shaping up as central to the 2012 campaign.

Voters appear to judge the economy by a variety of measures other than unemployment, from job creation to income growth, as well as by a qualitative sense of well-being or lack of it. In any case, there is no assurance that joblessness will continue to drop, or that the financial crisis in Europe will not derail any hope the White House has of being able to sustain the argument that the worst is behind us.

The global uncertainties have some Democrats concerned about overplaying the progress theme, out of concern that the economy could be rocked by events outside the control of the president or anyone else in the United States. As a result, the White House is sure to hedge its bets somewhat, continuing to hammer away at themes like economic fairness and Republican obstructionism. “While the U.S. economy is healing, the world economy continues to be in a fragile state and all economies are linked through trade and finance,” said Alan Krueger, the chairman of the White House’s Council of Economic Advisers.

Should major economic trouble hit, Mr. Obama’s team wants to have built the case for the argument that Democrats, more than Republicans, would better protect the middle class. No president has been re-elected since the 1930s with an unemployment rate at today’s level.

But if the unemployment rate continues to move downward even modestly next year, Mr. Obama and his team will be able to take some comfort from history. Under this administration, the peak in unemployment was a little over two years ago, at 10.1 percent. It fell briefly below 9 percent early this year, but has not been as low as 8.6 percent since March 2009. When Mr. Obama took office in January 2009 the rate was 7.8 percent, and rising fast.

Democrats are looking to 1984, when President Ronald Reagan won re-election after the rate peaked at 10.8 in late 1982, fell to 8.5 percent a year from Election Day — about where it is now — and declined to 7.4 percent by the time voters went to the polls.

Mr. Obama’s own forecast holds little prospect of a continued drop of the scale seen in 1984; the White House has projected that joblessness would average 9 percent next year. And this most recent November drop creates the risk that any backsliding next year would be cast as evidence that things are getting worse again.

If the economy is perceived to be deteriorating in the first half of an election year, it may be very difficult for a sitting president to change voter sentiment. In 1992, the last election to revolve around the economy, the elder President George Bush was defeated in his re-election bid as the unemployment rate rose to a high of 7.8 percent in June before easing back to 7.3 percent by Election Day.

If nothing else, the positive news on employment on Friday came at a moment when Democrats were gaining confidence that they had found an economic message that was resonating with voters, leaving Republicans feeling a bit off balance after a year in which they have driven the agenda in Washington.

Republicans on Capitol Hill were showing signs of division over whether to go along with Mr. Obama’s demand for an extension of the payroll tax deduction. Mr. Obama, in turn, turned up the pressure on Republicans to go along before adjourning for Christmas.

But on the campaign trail, Mr. Obama’s potential Republican challengers were ceding no ground. Newt Gingrich called Friday’s employment report “yet another landmark in the Obama jobs crisis.” The key statistic, Mr. Gingrich said, was the more than 300,000 Americans who had dropped out of the labor force.

Article source: http://feeds.nytimes.com/click.phdo?i=84f4bc8656d03aecca0e928273310c89

Filed Under: Business News Tagged With: , ,

Signs of Hope in Jobs Report; Unemployment Drops to 8.6%

December 2, 2011 by Leave a Comment

The unemployment rate fell to 8.6 percent, after having been stuck around 9 percent for most of 2011, the Labor Department said Friday. Additionally, a separate government survey found that the nation’s employers added 120,000 jobs last month, after adding 100,000 jobs in October.

These numbers were not particularly impressive by historical standards — they were just about high enough to keep up with population growth — but employment in the previous two months was revised upward substantially, too.

“If you go back to August, all sorts of people were telling us that the economy was headed straight into recession,” said Paul Ashworth, senior United States economist at Capital Economics. “Since that point, we’ve become more and more worried about the euro zone and other areas of the global economy, but somehow, at least for the moment, the U.S. economy seems to be shrugging all that off.” Still, concerns remain about the economy’s ability to withstand these international dangers.

The jobless rate fell partly because more workers got jobs, but also because about 315,000 workers dropped out of the labor force, and the jobless rate counts only people who are actively looking for work. Even so, the country still has a backlog of more than 13 million unemployed workers, whose periods of unemployment averaged an all-time high of 40.9 weeks.

“They say businesses are refusing to look at résumés from the unemployed,” said Esther Perry, 59, of Bedford, Mass., who participated in a recent report on unemployed workers put together by USAction, a liberal coalition. “What do you think my chances are? Once unemployment runs out, I don’t know what I will do.”

The continued fragility of the economy underscores just how much President Obama needs additional stimulus, a tidy and fast resolution to the European debt crisis or some other breakthrough to reinvigorate the job market before the 2012 presidential election.

On the issue of government action to stimulate the economy, there has been some movement in Washington toward extending the payroll tax cut, which is currently scheduled to expire at the end of this month. Economists have said that allowing the expiration of the tax cut — which lets more than 160 million mostly middle-class Americans keep two percentage points more of their pay checks — could be a severe drag on both job creation and output growth.

“If isn’t extended, it will have an impact on consumer spending in the first half of next year because it’ll put a big dent in consumer income,” said Conrad DeQuadros, senior economist at RDQ Economics. “To the extent that reduces spending, there will be second-round effects on hiring.”

The other major stimulus program scheduled to expire by 2012 is the extended unemployment insurance benefits, which allow some jobless workers to continue receiving benefits for as long as 99 weeks. Already, millions of workers have exhausted their benefits, and ending extended benefits is likely to affect another sizable chunk of the unemployed.

“In January alone, 1.8 million workers who currently receive federal unemployment insurance or would have begun to receive it will be cut off if Congress does not renew the program,” according to a recent report from the National Employment Law Project.

Unemployment benefits are believed to have one of the most stimulative effects on the economy, since recipients of these benefits are likely to spend all of the money they receive quickly and so pump more spending through the economy.

Article source: http://feeds.nytimes.com/click.phdo?i=cc9db1f61f6cf275ba25161498431303

Filed Under: Business News Tagged With: , ,

Britons Are Young, Ready and Willing, but Few Jobs in Sight

November 17, 2011 by Leave a Comment

LONDON — Zach Igglesden has been sending out dozens of job applications a week for the past year to companies across Britain. So far, he said, he has not even been invited to an interview.

Mr. Igglesden, 20, of Southend, east of London, finished secondary school two years ago and decided against pursuing a university education because he did not want to graduate with the burden of a student loan and no job.

His goal is relatively modest — to work as a sales assistant in a shop — but he said he had repeatedly been turned down because he lacked experience.

“It’s just very frustrating,” Mr. Igglesden said. “If you’re lucky, you get a reply, but mostly you don’t hear anything at all.”

To the roster of pain inflicted by the European debt crisis, add this: rising and persistent joblessness among young Britons. Though not at the level of troubled euro zone countries like Greece and rooted in domestic problems as well, it has reached a point here that is setting off alarms across the political and economic spectrum.

Unemployment among British youth, defined as those 16 to 24 years old, rose above the politically sensitive threshold of one million in the three months through the end of September, the Office for National Statistics said Wednesday. That’s the highest level since 1992.

An estimated 20.6 percent of British youth not pursuing a full-time education were without a job, an increase of 1.8 percentage points from the previous three months.

The problem is not confined to youth. Total unemployment in Britain rose by 129,000 to 2.62 million in the third quarter, bringing the jobless rate to 8.3 percent, the highest in 15 years.

Youth unemployment has been climbing in many European Union member states as economies struggle and governments impose stringent austerity plans. Spain’s youth unemployment rate reached 45 percent in the second quarter, the worst among European Union members, followed by Greece with 42.9 percent rate, according to Eurostat, the European Union statistics agency.

Britain never joined the euro zone and relies on its own currency, the pound. But the British government, which like its Greek counterpart has cut public-sector jobs and spending to trim a huge budget deficit, blamed the poor employment data in part on the euro crisis, which has depressed demand for British products in European markets and caused British companies to hesitate to hire.

“These figures show just how much our economy is being affected by the crisis in the euro zone,” Employment Minister Chris Grayling said Wednesday. “Our European partners must take urgent action to stabilize the position.”

The Bank of England also cited the euro crisis Wednesday as a reason for slashing its outlook for economic growth in 2012 to 1 percent, from an earlier projection of 2 percent, and paring its forecast for 2013 by half a percentage point, to 2.5 percent.

“Implementation of a credible and effective policy response in the euro area would help to reduce uncertainty and so support U.K. growth, but its absence poses the single biggest risk to the domestic recovery,” the bank said in its quarterly Inflation Report.

The opposition Labour Party warned Wednesday that the coalition government headed by Prime Minister David Cameron needed to stop blaming the euro zone for Britain’s economic problems and slow down its aggressive spending cuts that are “hurting but not working.”

Even the Confederation of British Industry, an employers’ group that generally aligns with the economic policies of Mr. Cameron’s Conservative Party, called Wednesday for urgent action by the government to get Britons, especially young people, working.

“A generation risks being scarred by the devastating effects of long-term unemployment,” said John Cridland, the group’s director general.

Rising unemployment among the young is especially worrying because it can easily lead to long-term unemployment and make it harder for the next generation to find their way into the work force, economists and charity workers said. That would not only hurt economic growth but could also affect youth crime rates, research showed.

Reducing youth unemployment by one percentage point could save £2 million, or $3.2 million, by avoiding youth crime, according to research by the Center for Economic Performance, a research concern at the London School of Economics and Political Science.

Article source: http://www.nytimes.com/2011/11/17/business/global/britons-are-young-ready-and-willing-but-few-jobs-in-sight.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Senate Seeks to Punish China for Low Currency Rate

October 4, 2011 by Leave a Comment

The bill, which faces an uphill battle from both the Republican-controlled House and a reluctant White House, would require the Treasury Department to determine whether China is manipulating its currency, and then order the Commerce Department to impose retaliatory tariffs on certain Chinese goods.

China intervenes in currency markets to keep the value of its currency, the renminbi, artificially low, which makes Chinese goods cheaper in the United States — a practice that lawmakers and some economists say undercuts American businesses and worsens the nation’s jobless rate.

“Trade has helped us export our values of a free democratic society,” said Senator Jeff Sessions, Republican of Alabama and one of the bill’s co-sponsors, “but like democracy itself, trade must operate under a set of rules and values.”

 The measure, which goes further than a similar version that passed the Democratic-controlled House last year, cleared an initial procedural hurdle in the Senate on a 79-19 vote, with 16 Republicans and three Democrats opposed. It faces more debate before a final vote. The legislation would require the Treasury to use a lower standard for determining whether China’s currency was misaligned, prompting higher duties on Chinese imports. The Obama administration has pushed China to let its currency rise in value, but has stopped short of labeling it a manipulator.

While the debate over China’s currency is several years old, it has taken on new urgency amid a three-way race among the White House, House and Senate to write legislation to revive the job market. Senate Democrats, like Charles E. Schumer of New York, have chosen trade, a populist issue, while working behind the scenes to find a way to make President Obama’s jobs bill, which includes tax increases, more palatable to their members.

“This is a jobs bill because it is about American competitiveness,” said Senator Debbie Stabenow, Democrat of Michigan, another co-sponsor. Noting that auto suppliers have lost bids to Chinese companies because of the currency, she said leveling the playing field would create 1.6 million American jobs.

But while the Chinese currency measure enjoys Republican support in the Senate, it is viewed less favorably in the House, where Representative Dave Camp, the Michigan Republican who is chairman of the Ways and Means Committee, is expected to offer his own less aggressive version later this year. Some lawmakers fear that the measure would cause a trade war at a time when China has moved slowly to increase the value of its currency.

Representative Eric Cantor, Republican of Virginia and the House majority leader, said the bill could have “unintended consequences,” contributing perhaps to an increase in consumer prices.

The measure also puts the White House, which has recorded only limited success in lobbying China, in a tough spot. The press secretary, Jay Carney, said China’s currency had not gone up enough, but added, “We need to make sure that if we are pursuing this goal, a goal that we share with members of Congress, we need to do it in a way that’s consistent with our international obligations and is effective.”

The vote drew criticism from some lawmakers who said that at a time of economic crisis, the Senate had gotten its priorities wrong.

Similar criticisms came from some in the business community, who said that punishing China would not create more jobs at home, and would distract attention from more urgent issues, like lack of market access.

“Much of what we import from China is stuff we imported from somewhere else before that,” said John Frisbie, president of the U.S.-China Business Council, who noted that as costs rise in China, companies would simply move their factories to even cheaper countries. “If this is a jobs bill, it is a jobs bill for Vietnam.”

The renminbi has risen about 6 percent against the dollar since China loosened its peg in June 2010. Economists estimate it is still undervalued by 25 percent relative to the dollar. That disparity has spiked in recent weeks, as the dollar has risen, after a prolonged period of decline, because of the debt crisis in Europe.

China continues to run yawning trade surpluses with the United States: $273 billion in 2010, compared with $83 billion a decade earlier. But China’s trade surplus has declined, as a percentage of its overall economy, since 2007 — a trend that Chinese officials cite to argue that it is gradually moving to a market exchange rate.

“They say they’re on a glide path to currency equilibrium,” said Nicholas R. Lardy, an expert in the Chinese economy at the Peterson Institute for International Economics. With growth slowing in China, Mr. Lardy said it was highly unlikely that Beijing would risk anything that would slow its export engine.

Over time, tensions between the United States and China have shifted from the exchange rate to other issues, like intellectual property rights and measures that bar American companies from access to the Chinese market. Worries about currency have also waned as American corporations have established their own factories in China, enabling them to benefit from its cheap currency.

In a new survey of its members, the U.S.-China Business Council found that exchange rates ranked 27th on a list of concerns.

Article source: http://feeds.nytimes.com/click.phdo?i=ff2db5650a1b45c35fb0ec5b73effa16

Filed Under: Business News Tagged With: , ,

German Jobless Rate Declines

September 29, 2011 by Leave a Comment

BERLIN — Unemployment fell sharply in Germany this month, data released Thursday showed, reflecting continued hiring despite fears of an economic slowdown as Europe’s debt crisis festers.

The Federal Labor Agency reported the unemployment rate dropped to 6.6 percent for September from 7 percent in August. Seasonally adjusted, the number of unemployed people declined by 26,000 from August, which the agency described as an unexpectedly high figure. Analysts had been expecting a drop of around 8,000.

Frank-Jürgen Weise, director of the agency, said there was particularly strong demand in retail, construction-related trades, tourism and health care, as well as for temporary workers.

The adjusted level of joblessness has now fallen to 2.92 million people, or 6.9 percent, the lowest for 20 years. The figures also show how Germany, Europe’s largest economy and one of the world’s leading export-driven economies, has fully recovered from the financial crisis of 2008, when almost 3.2 million people were registered as unemployed.

Analysts said the expansion of the labor market reflected high levels of orders for companies, the expansion of the services sector and the late ending of the summer holidays.

The adjusted employment figures lag by one month, however, which means that the real impact of the latest flare-up in the euro zone crisis will be clearer next month.

“The main risks presently stem from ramifications of the euro zone debt crisis, related banking sector concerns and the slow U.S. economy,” said Timo Klein, an economist at IHS Global Insight. He added that Germany’s economic recovery appeared strong enough to prevent a recession.

Growth in the German economy slowed during the second quarter of this year, to 0.1 percent, and private consumption contracted for the first time since 2009 as consumers held back on spending because of the uncertainties.

But Jens Weidmann, the president of the country’s central bank, the Bundesbank, said this week, “we expect economic activity to remain robust in the third quarter.”

The number of registered unemployed would have been much higher had the government during the 2008-9 financial crisis not subsidized a program whereby companies introduced reduced-time work programs, paying their staff members less in order to retain them. The difference in wages was partly made up by the state.

Figures from the labor agency showed that fewer companies were still working with short-time workers, especially the automobile industry, which has been lifted by growth in the Chinese market and the expansion there of the luxury car market as the middle class expands.

Article source: http://www.nytimes.com/2011/09/30/business/global/german-jobless-rate-declines.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Spain Approves Measure to Free Up Labor Market

June 10, 2011 by Leave a Comment

MADRID — The Spanish government approved Friday measures intended to reduce chronically high unemployment by introducing more flexibility in labor relations, despite failing to get support from employers and unions for the changes.

With Spain hampered by a 21 percent jobless rate — twice the European average — the government chose to make the ruling by decree after four months of negotiations between the biggest labor unions and the Spanish Confederation of Employers’ Organizations, known as C.E.O.E., broke down last week.

Both sides have voiced their discontent with the government’s compromise, while outside experts suggested so much had been diluted or left open that the package would have little effect on the labor market.

“I sadly don’t believe this reform will have any real impact on job creation,” said Federico Durán, head of the labor department at Garrigues, one of Spain’s biggest law firms. “Everything will now be left to further mediation and arbitration, and we know from past experience that it’s hard to get any progress that way.”

The reform aims to loosen Spain’s rigid system of industry-wide collective bargaining and allow greater leeway at the company level.

Union leaders are angered by a part of the package that will allow employers to adjust working hours according to the workload. However, the legislation as approved did not define under what circumstances working hours could be altered, suggesting that the issue should instead be left to a case-by case negotiation.

Business groups, meanwhile, say the changes do not go far enough.

Juan Rosell, the president of the C.E.O.E., said earlier this week that the government’s plan would do little to encourage company bosses who have become “panicked” about hiring more people because of inflexible terms of employment.

Easing collective bargaining agreements was meant to be one of the major — and likely final — achievements of the Socialist government Prime Minister José Luis Rodríguez Zapatero of Mr. Zapatero. A general election is expected by March, in which Mr Zapatero will make way for a new Socialist candidate.

“I am afraid this is it,” in terms of reforms from the current government, said Luis Garicano, a professor at the London School of Economics and expert on the Spanish economy, “all we can hope is that the pension reform, which was negotiated with the unions months ago, does pass the parliament as soon as possible.

He described the new rules as a “minor reform” that does not resolve the main problem facing the labor market: wages rates that are higher than warranted by the demand and supply conditions of economy. Collective bargaining agreements pushed up wages even during the height of crisis as unemployment rose, he said.

The World Bank and others have identified the country’s rigid labor market as one of the main reasons why Spain’s jobless rate has more than doubled since the onset of the world financial crisis.

According to the European Union’s statistics agency Eurostat, the Spanish unemployment rate was 20.7 percent in March, comfortably the highest level in the Union. Youth unemployment stood at 44.6 percent.

Under pressure from creditors to introduce structural changes to the economy as well as clean up its finances, the government in Madrid a year ago pushed through a plan that, among other things, cuts severance payouts to 33 days per year of employment, from the norm of 45 days.

A government-managed fund also was set up to cover a part of the severance pay for indefinite work contracts — a move that was intended to discourage companies from relying on temporary workers.

Last year’s package, however, left some key elements untouched, including any change to the system of collective bargaining agreements.

The Socialist government had hoped that changes could be negotiated directly by employers and unions, thereby also reducing the likelihood of resulting labor unrest.

After meeting with union leaders on Thursday, Valeriano Gómez, the labor minister, defended the proposals as an adequate compromise.

“Each side has a vision of its role in labor relations,” he said. “The role of the government is to impose order, to impose peace.”

The government’s own bargaining position, however, has been considerably weakened after the Socialists suffered last month their worst-ever results in regional and municipal elections.

At the same time, high youth unemployment has fueled a protest movement that started on May 15 in Puerta del Sol, a square in downtown Madrid, before spreading across the country.

Demonstrators in Madrid have voted to dismantle their Sol encampment on Sunday, but further actions are expected, notably after a scuffle last Wednesday between police and protestors in Valencia, Spain’s third-largest city.

Matthew Saltmarsh contributed reporting from Paris.

Article source: http://feeds.nytimes.com/click.phdo?i=b47fece74df7d7122f5e1db095ff4c7d

Filed Under: Business News Tagged With: , ,

Spain Jobless Rate Hits New Eurozone Record

April 29, 2011 by Leave a Comment

MADRID (AP) — Spain’s unemployment rate rose sharply to a new eurozone high of 21.3 percent in the first quarter of the year, with a record 4.9 million people out of work, the government said Friday. The rate was the highest reported by the country since 1997.

Joblessness during the January-March period jumped 1 percentage point from 20.3 percent at the end of 2010, and adds pressure on Spain as it tries to recover from nearly two years of recession and convince investors that it can handle its heavy debt load.

The country is struggling to shift away from dependence on the construction sector, which supported growth for years until the financial crisis popped the Spain’s real estate bubble, as well as make the economy more competitive and reduce national debt.

The number of unemployed people in Spain stood at 4,910,200 at the end of March, up about 214,000 from the previous quarter, said the National Statistics Institute, or INE.

In an unemployment line in a working-class Madrid neighborhood, people grimly waiting to sign up for benefit payments said they saw little hope of finding new jobs for years.

Johnny Albuja, 29, was laid off from his job cleaning offices when the company he worked for lost a contract, but only expected to get unemployment benefits for three months since he worked for the company for just one year.

Over the past year, his father and brother were laid off from a metal works company as demand plummeted.

“The situation is really difficult right now,” Albuja said. “You can’t live well, you still have to pay the mortgage and it’s tough to get by.”

The jobless rate is now at its highest since the first quarter of 1997, when it was 21.3 percent, although officials have since changed the way they measure unemployment, said an INE official who spoke on condition of anonymity in keeping with agency policy. But the overall number of people unemployed is a record, the agency said.

Jobs were lost across the entire Spanish economy, with services, manufacturing, agriculture and construction all taking hits.

Adding to the bad news for households, consumer prices rose sharply, INE said Friday. The consumer price inflation rate jumped to an annual 3.8 percent in April, up two-tenths of a point from March. Higher fuel prices prompted by unrest in the Middle East and North Africa have been pushing the rate up since January.

Spain must hold a general election by March 2012, and polls show the governing Socialists trailing badly. Prime Minister Jose Luis Rodriguez Zapatero has stated he will not seek a third term.

As much of Europe and Germany in particular recovers from the global recession, Spain is forecasting meager growth of just 1.3 percent for itself in 2011, and even the Bank of Spain says that prediction is too optimistic.

The government has said it expects job-creation to improve in the second half of the year. The second and third quarters of the year traditionally boost Spain’s economy as tourists flock to the nation. Spain’s tourism sector accounts for 11 percent of the country’s gross domestic product.

Friday’s report said the number of households in which everyone is unemployed rose by 58,000 to about 1.4 million. It is common for young Spaniards to live at home well into their 30s, in part because traditionally it has been so hard for them to find jobs.

The numbers came out on the same day the government was expected to approve a plan to crack down on tax evasion by flushing out the country’s vibrant underground economy.

Many small- and medium-sized companies have workers whom they pay fully or partially under the counter to skirt tax and social security obligations, and some estimates say the underground economy accounts for 20 percent of Spanish economic output.

___

Alan Clendenning contributed to this report.

Article source: http://www.nytimes.com/aponline/2011/04/29/business/AP-EU-Spain-Financial-Crisis.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,

Filings for Unemployment Benefits Drop

April 22, 2011 by Leave a Comment

WASHINGTON (AP) — Fewer people applied for unemployment benefits last week, the Labor Department said Thursday, partly reversing a sharp increase in applications the previous week.

The department said the number of people applying for unemployment benefits dropped 13,000 to a seasonally adjusted 403,000 in the week ended April 16. Applications rose 31,000 a week earlier.

Applications near 375,000 are consistent with sustainable job growth. Applications peaked during the recession at 659,000.

The four-week average, a less volatile measure, rose for a second week to 399,000, which is about 10,000 higher than it was a month ago.

The average has fallen about 7 percent since late January, but applications have plateaued in recent weeks.

The total number of people receiving unemployment benefits declined to 3.7 million. But that does not include millions of the unemployed who are getting benefits under emergency programs enacted by Congress during the recession. Including those programs, 8.3 million people received unemployment benefits during the week ending April 2, the latest data available. That was a drop of more than 200,000 from the previous week.

In a second economic report, a private research group said its measure of future economic activity rose 0.4 percent in March, the ninth consecutive monthly increase.

The group, the Conference Board, said its index of leading economic indicators began moving higher last fall as the jobless rate dropped and the stock market rallied. It had risen a revised 1 percent in February. The gains in the index suggest that the economy will strengthen as summer approaches, despite rising oil and food prices and the impact of the earthquake in Japan, the world’s third-largest economy.

In March, the index received a lift from signs of growing demand in the American manufacturing sector and a rebound from a five-decade low in building permits. The permits signal future construction in the housing market.

Economists surveyed by FactSet had expected the index to grow 0.3 percent in March.

Finally, a report from the Federal Reserve Bank of Philadelphia found that manufacturing activity in the Philadelphia area fell more than forecast in April.

The bank’s broadest index fell to 18.5, from 43.4 in March. That was the highest level since 1984. Readings above zero indicate expansion.

Increases in input prices continue to be widespread, according to a release, and a significant percentage of companies reported higher prices for their own manufactured goods.

Article source: http://feeds.nytimes.com/click.phdo?i=f8b64b5f36c0966db7436b672c52a208

Filed Under: Economy News Tagged With: , ,

Executive Pay: A Special Report: The Drought Is Over (at Least for C.E.O.’s)

April 9, 2011 by Leave a Comment

After shrinking during the 2008-9 recession, paychecks for top American executives are growing again — in many cases, significantly so.

Rarely has the view from the corner office seemed so at odds with the view from the street corner. At a time when millions of Americans are trying to hang on to homes and millions more are trying to hang on to jobs, the chief executives of major corporations like 3M, General Electric and Cisco Systems are making as much today as they were before the recession hit. Indeed, some are making even more.

The disparity is especially stark as companies are swimming in cash. In the fourth quarter, profits at American businesses were up an astounding 29.2 percent, the fastest growth in more than 60 years. Collectively, American corporations logged profits at an annual rate of $1.678 trillion.

So far, this recovery has not trickled down. After two relatively lean years, C.E.O.’s in finance, technology, energy and beyond are pulling down multimillion-dollar paychecks. What many of these executives aren’t doing, however, is hiring. Unemployment, although down from its peak, stood at 8.8 percent in March. And few economists predict the jobless rate will drop substantially anytime soon.

For the average C.E.O., however, the good times have returned. The median pay for top executives at 200 major companies was $9.6 million last year. That was a 12 percent increase over 2009, according to a study conducted for The New York Times by Equilar, a compensation consulting firm based in Redwood City, Calif.

Many if not most of the corporations run by these executives are doing better than they were in the downturn. Many businesses were hit so hard by the recession that even small improvements in sales and profits look good by comparison. But C.E.O. pay is also on the rise again at companies like Capital One and Goldman Sachs, which survived the economic storm with the help of all those taxpayer-financed bailouts.

Against such a backdrop, it’s noteworthy that recent moves to empower shareholders seem to have done little to tamp down corporate enthusiasm for paying top dollar to top executives. This is generally the season when companies hold annual meetings for their shareholders.

Under new rules included in the Dodd-Frank financial regulations, nearly all public companies must now give shareholders a say on executive pay. Analysts and corporate governance experts are wondering how these votes will play out, even though companies are under no obligation to heed their shareholders’ advice.

“What’s funny about pay is that when the market is going up, it covers a lot of sins,” said David F. Larcker, director of the corporate governance research program at the Stanford Business School. It is when the market “is going sideways or down that funny things happen,” he said: “Considering some of the current pay packages, shareholders want to see strong results.”

On this year’s list, the highest-paid C.E.O. was Philippe P. Dauman of Viacom, who made $84.5 million in just nine months. (Viacom changed its fiscal year-end to September from December.)

Viacom has said that the compensation was inflated by one-time stock awards linked to a long-term contract signed last year.

Also at the top was Ray R. Irani, the C.E.O. of Occidental Petroleum, who took home $76.1 million last year, up 142 percent from the previous one. Last year, the board awarded Mr. Irani a $33 million cash bonus plus $40.3 million in stock awards, more than double what he received in 2009.

Mr. Irani is retiring this year, and Occidental has said that it has set higher hurdles that will significantly reduce executive pay packages.

Lawrence J. Ellison of Oracle, the software giant, followed close behind, with a $70.1 million payout, though that is down 17 percent from 2009. Still, Mr. Ellison’s fortunes are just fine: he had more than $26.3 billion in stock and other holdings in Oracle in 2010.

UNLIKE some previous years, 2010 registered broad gains in executive pay, benefiting C.E.O.’s from nearly all parts of the economy.

Many consumer products companies also offered rich pay packages, including one for John F. Lundgren, chief executive of Stanley Black Decker, whose pay rose 253 percent, to $32.57 million, after a huge stock award. His counterpart at Emerson Electric, David N. Farr, saw his pay rise 233 percent, to $22.9 million, also because he was granted millions in stock.

Most executive compensation plans consist of stock options that ballooned as markets recovered after the financial crisis. Although executives typically have to wait several years before cashing in new options, the booming stock market still meant that those options were a bonanza for many chiefs, said Bruce H. Goldfarb, a compensation consultant based in New York.

The chief executive of Ford Motor, Alan R. Mulally, made $26.5 million in total pay, up 48 percent over the previous year as a result of big stock option awards. Ford was the only one of Detroit’s Big Three automakers that did not receive a government bailout, and its stock value rose 68 percent last year.

New government regulations put in place after the financial crisis have emboldened some activist shareholders to try again to rein in compensation they deem excessive and undeserved. Although companies will not be bound by such votes, they will have to disclose the results in reports filed with the Securities and Exchange Commission, as well as how they considered the voting in setting subsequent executive pay.

Still, it remains to be seen whether these changes have any teeth. For “say on pay” votes, there is no standard for what percentage of shareholder votes constitutes an endorsement or a rebuttal of policies. Even the prospect of the public votes, though, appears to have altered the relationship between investors and corporate executives on many discussions in recent months.

Article source: http://feeds.nytimes.com/click.phdo?i=d70d7efe0ee89eb3ff40c568d3cd1d49

Filed Under: Business News Tagged With: , ,
« Previous Page