labor department

Economix: Length of Unemployment Continues to Break Records

August 5, 2011 by NewsMaker Leave a Comment

CATHERINE RAMPELL

Dollars to doughnuts.

The average worker who is unemployed has been searching for a job for 40.4 weeks, or more than nine months, according to new Labor Department figures.

That is the longest average unemployment duration on record:

Bureau of Labor Statistics

This pattern is especially worrisome because unemployment begets unemployment — that is, for a whole host of reasons, people who are already out of work for a long period of time have very slim chances of finding new work in the near future. Just consider the catch-22 some employers are creating by stating that they’ll only hire workers who already have jobs.

In other words, what started out as a cyclical problem could morph into a structural one — particularly if the country allows the nation’s 14 million jobless workers to become a sort of underclass like the one many European countries have struggled with.

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Filed Under: Economy News Tagged With: labor department, period of time, unemployment duration

Markets Tumble After U.S. Labor Data

August 4, 2011 by NewsMaker Leave a Comment

In morning trading, the Standard Poor’s 500-stock index dropped 29.67 points, or 2.35 percent. The Dow Jones industrial average lost 243.44, or 2.05 percent, to 11,653.00, and the Nasdaq index slid 70.24 points, or 2.61 percent.

New claims for unemployment benefits in the United States edged down last week, pointing to a marginal improvement in the labor market, the Labor Department said.

“Essentially, claims have stalled and the growth of employment has stalled, which is very consistent with what we know to be the case for the economy,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, N.Y.

“Everything, the claims numbers included, says the same thing — the economy has stopped.”

The S.P. 500 index rose on Wednesday after seven straight losing sessions, but worries about the economy kept investors jittery and trading volatile with Friday’s key unemployment report looming.

Further weighing on futures were comments from European Central Bank President Jean-Claude Trichet that “downside risks may have intensified.”

Retailers will be in focus as chain stores reported healthy July sales increases. Deep discounts and the warmest weather in decades brought shoppers to malls.

But the clothes retailer Aeropostale slid 10.4 percent after it forecast second-quarter revenue below estimates.

General Motors edged up 0.04 percent to $27.18 after it reported quarterly profit nearly doubled.

Kraft Foods jumped 5.7 percent to $36.25 after it disclosed plans to split into two listed companies: global snacks and North American groceries. It also posted better-than-expected quarterly results.

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Filed Under: Business News Tagged With: labor department, stock index, unemployment report

Off the Charts: Adding to Jobless Woes, Little Turnover in the Workplace

July 16, 2011 by NewsMaker Leave a Comment

The Bureau of Labor Statistics reported this week that the rate of discharges and layoffs rose a little in May, to 1.27 percent of the work force. But the rate, which reached a record low of 1.11 percent in January, remains lower than it was for most of the last decade.

Unfortunately, hiring also remains very slow, although it has improved a little in recent months from the lows reached during the depths of the recession and credit squeeze.

In normal times the American labor market is characterized by a strong level of turnover; more than 4 percent of all jobs change hands each month. But that turnover rate plunged during the recession and has barely started to recover, as can be seen from the accompanying charts.

The low turnover rate is probably one reason long-term unemployment has become a major problem. Most job openings occur because employees resign, presumably because they find a better job or believe they will be able to do so. The vacated jobs are available to be filled, perhaps by people who had been unemployed.

Presumably the number of employees unhappy with their current jobs has not declined, but over the most recent 12 months, 13 million fewer people quit jobs than did so during the year before the recession began at the end of 2007. Many of those who did not resign may be unhappy and frustrated that they are not able to change jobs.

The decline in the number of people switching jobs may be partly a result of the collapse in housing prices. There are no doubt some workers who would like to change jobs and who could get better ones if they were willing to move. But with many homes no longer worth the amount owed on them, a move could be much more difficult than it would have been when real estate prices were higher.

The figures are gathered by the Labor Department through the Job Openings and Labor Turnover Survey, known as Jolts. That survey began in 2000, so there is a limited amount of history. The survey comes out more than five weeks after the overall jobs numbers are released, so it normally gets little attention.

It is possible that the slow level of turnover in the labor market has distorted the normal jobs report. In June, the government reported that total employment rose by 376,000, but that after the seasonal adjustment the increase was a disappointing 18,000. This year, much as in 2010, the job market has appeared to strengthen early in the year and then fade in the spring and summer.

But if reduced turnover means there is less hiring during the months when employers are usually adding temporary help, and fewer job losses in months that are seasonally weak, that could mean the seasonal adjustments are currently overstated. The seasonal adjustments add the most jobs during the winter months of January, February and March and subtract the most during the summer months of June, July and August.

If that is true, then the job picture was neither as good as it appeared in the winter nor as bad as it has looked over the last two months.

Floyd Norris comments on finance and the economy in his blog at nytimes.com/norris.

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Filed Under: Business News Tagged With: labor department, last decade, lows

Midwest Manufacturing Picked Up Steam in June

July 1, 2011 by NewsMaker Leave a Comment

The Institute for Supply Management, Chicago, said on Thursday that its business barometer rose to 61.1 after slowing abruptly to 56.6 in May. The gain defied economists’ expectations for a decline to 54.

The sturdy factory activity in the automotive-heavy region ended a string of weak regional manufacturing surveys and raised optimism that the economy might start to emerge from the soft patch of the first half of the year.

“This may be an indication that we are at least at the bottom of this slowdown, not only in manufacturing but also economic,” said Millan Mulraine, senior macro strategist at TD Securities in New York. “In the months ahead we are likely to see a resurgence in growth.”

But optimism was tempered somewhat by a separate report from the Labor Department showing that initial claims for state unemployment benefits slipped just 1,000 to 428,000 last week. Economists had expected claims to drop to 420,000.

It was the 12th straight week that claims have been above 400,000, a sign the labor market has stagnated. Employment stumbled badly in May, with employers adding just 54,000 jobs — the fewest in eight months.

The brightening manufacturing picture was enhanced by a survey from the Federal Reserve Bank of Kansas City that showed factory production in its region rebounded strongly this month after slumping in May.

The bullish reports prompted some institutions, including Deutsche Bank and JPMorgan, to raise their forecasts for Friday’s Institute for Supply Management index of national factory activity. They now expect the index to show underlying strength in a sector that has led the economic recovery.

Details of the Chicago Purchasing Managers Index survey were generally upbeat, with new orders and production rising. The employment index was lower but still indicated expansion.

“The recovery in the Chicago P.M.I. strongly suggests that manufacturing activity got a noticeable boost from improving auto sector conditions in the back half of the month,” said Joseph A. LaVorgna, chief United States economist for Deutsche Bank.

Recent surveys from the New York and Philadelphia regional Fed banks have shown steep declines in factory activity in those two areas, but Mr. LaVorgna said the Chicago PMI had a bigger weighting in the ISM index than the other two combined.

A report on Wednesday showed Japanese factory output rose by the most in almost 60 years in May, pointing to a speedy restoration to earthquake-damaged supply chains.

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Filed Under: Economy News Tagged With: economic recovery, initial claims, labor department

Housing Starts Increase, While Jobless Claims Slip

June 16, 2011 by NewsMaker Leave a Comment

WASHINGTON (Reuters) — Housing starts in the United States rose more than expected and permits for future construction touched a five-month high in May, a government report showed on Thursday, but any recovery will be hampered by a glut of pre-owned homes, economists warned.

The Commerce Department said housing starts rose 3.5 percent to a seasonally adjusted annual rate of 560,000 units, retracing almost half of April’s steep decline. April’s starts were revised up to a 541,000 unit pace, which was previously reported as a 523,000 unit rate.

Compared to May last year, residential construction was down 3.4 percent.

An oversupply of previously owned houses, especially foreclosed properties which sell well below their value, is dampening new home construction. A survey on Wednesday showed sentiment among home builders at its lowest in nine months in June.

Last month, there was an increase in groundbreaking for both multi- and single-family homes. Starts in Western states were the highest since August.

Multifamily home starts rose 2.9 percent. The increase in the construction of multifamily units reflects a growing demand for rentals as relentless declines in house prices encourage Americans to delay home purchases and even give up properties whose mortgages are far higher than their values.

Single-family home construction, which accounts for a large portion of the market, rose 3.7 percent.

The government also reported Thursday that new applications for jobless benefits dipped in the latest week but remained at levels too high to put a dent in the unemployment rate.

The Labor Department said new jobless claims fell to 414,000 last week from an upwardly revised 430,000 in the prior week.

Claims have been above 400,000 for two months, reflecting a rough patch in the recovery that has led to renewed weakness in an already anemic job market.

Continuing claims eased to 3.68 million from 3.70 million in the week ended June 4, the most recent data available, while the total number of recipients on benefits rolls, including those receiving emergency benefits under a Congressional extension, remained at 7.4 million in the week ended May 28, down about 200,000 from a week earlier.

The economy produced just 54,000 new jobs in May and the unemployment rate rose to 9.1 percent from 9.0 percent.

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Filed Under: Economy News Tagged With: labor department, multifamily units, steep decline

Stocks End Slightly Higher Despite Weak Economic News

May 26, 2011 by NewsMaker Leave a Comment

The Labor Department said more people applied for unemployment benefits last week, the first increase in three weeks. The number of people seeking benefits rose by 10,000 to 424,000, more than analysts were expecting.

Applications are above the 375,000 level that is consistent with sustainable job growth. Applications peaked at 659,000 during the recession. Employers stepped up hiring this spring, but some economists worry that rising applications for unemployment benefits indicate hiring is slowing.

The Commerce Department said the economy grew at a sluggish 1.8 percent annual rate in the January-to-March quarter as surging gasoline prices and sharp cuts in government spending overshadowed strong corporate earnings. Consumer spending grew at just half the rate of the previous quarter, less than previously estimated. A surge in imports widened the United States trade deficit.

Economists believe the economy is doing only slightly better in the current April-to-June quarter. Consumers remain squeezed by gas prices near $4 a gallon and renewed threats from Europe’s debt crisis.

At the close of trading, the Dow Jones industrial average was up 8.10 points, or 0.07 percent. The Standard Poor 500-stock index was up 5.22 points, or 0.40 percent. The Nasdaq composite index was up 21.54 points, or 0.78 percent.

The weak economic news drew investors toward safer assets. The yield on the 10-year Treasury note fell to 3.11 percent, near its lowest level of the year. It was trading at 3.15 percent shortly before the economic reports came out. Bond yields fall when their prices rise.

Microsoft rose 2 percent after a hedge-fund manager called for the company’s board to replace its chief executive officer, Steven Ballmer. Tiffany jumped 8 percent after reporting that higher sales lifted earnings. Concerns about the European debt crisis continue to weigh on markets. Stocks fell for three days before Wednesday’s gains, which came as higher oil prices lifted energy stocks.

Greece’s government and opposition party failed late Tuesday to reach agreement on how to pare the country’s debts, adding to the uncertainty surrounding Greece’s financial future. Many analysts believe Greece will eventually have to restructure its debt, possibly by extending interest payments or lowering interest rates.

Analysts are also concerned about how much of an impact the supply disruptions stemming from the March earthquake and tsunami in Japan will have on manufacturing in the United States, especially on factories making cars and electronic products that depend on component parts from Japan.

Some analysts think Japan’s supply chain problems could shave as much as one-half a percentage point from growth in the April-to -June period.

Article source: http://www.nytimes.com/2011/05/27/business/27markets.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: chief executive officer, dow jones industrial, labor department

Stocks Fall on Weak Economic News

May 26, 2011 by NewsMaker Leave a Comment

In early trading, the Dow Jones industrial average fell 58.54 points, or 0.5 percent. The Standard Poor 500-stock index fell 4.07 points, or 0.3 percent. The Nasdaq composite index was flat.

Concerns about the European debt crisis continue to weigh on markets. Stocks fell for three days before Wednesday’s gains, which came as higher oil prices lifted energy stocks.

Some analysts think Japan’s supply chain problems could shave as much as one-half a percentage point from growth in the April-to -June period.

In the morning, the Energy Information Administration is to release its weekly report on the nation’s crude oil supplies for the week ended May 20. Analysts expect a 1.6 million-barrel decrease, according to a survey by Platts, the energy information arm of McGraw-Hill. They expect gasoline supplies to rise by 750,000 barrels, distillate stocks to grow by 500,000 barrels and refinery utilization to increase 0.4 percentage point to 83.6 percent of capacity.

On Wednesday, the Dow Jones industrial average rose 38.45 points, or 0.3 percent, to close at 12,394.66. The Standard Poor index rose 4.19, or 0.3 percent, to 1,320.47. The Nasdaq rose 15.22, or 0.6 percent, to 2,761.38.

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Filed Under: Business News Tagged With: corporate earnings, labor department, year treasury note

Stocks Drop at Open as Oil Prices Decline

May 12, 2011 by NewsMaker Leave a Comment

Crude oil was trading around $97 a barrel Thursday morning, down more than 1 percent. Oil and gas futures dropped sharply Wednesday after a government report showed demand for gasoline fell by the largest amount in seven weeks.

Silver dropped more than 6 percent, extending a deep slide from $48.60 an ounce at the end of April.

The government released reports on unemployment benefits, wholesale prices and retail sales before the stock market opened. The Labor Department said applications for unemployment benefits fell last week to 434,000, after surging the previous week. Economists expected a slightly bigger drop in claims.

Retail sales rose for the tenth straight month in April, but much of the gain came from surging gasoline prices. Excluding the 2.7 percent jump in gasoline sales, retail sales rose just 0.2 percent.

Higher energy costs also pushed wholesale prices up 0.8 percent in April. That marked the seventh month in a row that companies had to pay more for raw materials.

Cisco Systems fell 5 percent in early trading, the largest drop among companies in the Standard Poor’s 500-stock index. The company said earnings slid 18 percent and lowered its earnings forecast. It plans to eliminate jobs to cut costs.

The Dow Jones industrial average was down 69.93 points, or 0.6 percent, to 12,560.10. The S. P. 500 was down 7.62 points, or 0.6 percent, to 1,334.46, and the Nasdaq composite index fell 13.83 points, or 0.5 percent, to 2,831.23.

Major indexes in Europe and Asia were also lower. The CAC 40 in France was down 1.2 percent.

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Filed Under: Business News Tagged With: gasoline prices, labor department, stock market

U.S. Consumer Prices Up 0.5%, Pushed Mainly by Food and Gas

April 15, 2011 by NewsMaker Leave a Comment

But while consumers are feeling the pinch at gas stations and grocery stores, economists emphasized that the March results were in line with the Federal Reserve’s view of the economy and should keep the policy-making board from raising its benchmark rate or ending its economic stimulus.

The Labor Department said that the Consumer Price Index rose 0.5 percent in March, matching a 0.5 percent rise in February. Gasoline and food prices accounted for almost three-quarters of the increase, but outside of those two areas, prices remained subdued. In the last 12 months, the index has increased 2.7 percent.

The core index, which excludes food and energy, rose 0.1 percent in March, compared with a 0.2 percent rise in February. The core index rose 1.2 percent in the last 12 months.

With a rise in food prices and gasoline now averaging $3.82 for a gallon of regular unleaded, inflationary pressures were likely to continue to affect household budgets in the short-term, economists said. “So if you don’t eat or drive a car, you are feeling little inflation,” the chief economist for PNC Financial Services, Stuart Hoffman, said.

Analysts had forecast an increase of 0.5 percent in the broader index and a 0.2 percent rise in the core index.

But underlying pressures as reflected in the core index are low.Mr. Hoffman and other economists said that the index was within the “comfort zone” of the Federal Reserve, whose policy-making board meets on April 26. As such, they said they did not expect the Fed to take any action on rates or its quantitative easing program, known as QE2, which is purchasing $600 billion in government securities.

“I think they will say the economy is on firmer footing,” Mr. Hoffman said. “At the end of the day they will reaffirm they are going to finish QE2.”

But he emphasized that the central bank would continue to be concerned about inflation expectations of consumers, who would demand higher wages, and businesses, which could post higher prices and perhaps cut spending.

The relatively slow increase of prices in the services sector, and the decline in apparel prices, were helping to offset price rises elsewhere, Dan Greenhaus, the chief economic strategist for Miller Tabak Company, said in a research note.

Friday’s report showed that prices for all types of gasoline rose 5.6 percent in March, compared with 4.7 percent in February. It was the ninth consecutive increase in the gas index. Food costs increased 0.8 percent in March, after they rose 0.6 percent in February, the biggest jump since September 2008.

Economists have been concerned that higher energy costs will constrain consumer spending, even though oil prices are expected to decline in the second half of the year. Consumers have also been coping with a trend of higher food costs, as bad weather has hit some agricultural commodities, including corn and wheat, while vegetable prices have risen because of cold weather in parts of the south. Cotton prices have also soared.

Paul Ballew, a former Federal Reserve economist and a senior vice president for Nationwide Insurance, said the Fed would be watching commodity prices over the coming months but would likely remain on the sidelines until 2012 as they gauge the sustainability of the recovery.

“You will start to see them talk about their exit strategy going forward,” he said.

Higher prices were also in focus in global economies. Higher consumer prices were reported Friday in India, Europe and China. In China, figures showed consumer prices rose 5.4 percent in March, up from February’s 4.9 percent. Inflation in the 17-nation euro region increased to an annualized rate of 2.7 percent from 2.4 percent in February, the European Union’s statistics office reported Friday.

Japan was highlighted in another economic report in the United States on Friday. A Federal Reserve report said industrial production grew 0.8 percent in March, above analysts forecasts of 0.6 percent and compared with a slight 0.1 percent rise in February. The report included a 0.7 percent rise in manufacturing output, especially for durables, and motor vehicles and parts.

But in the coming months, the sector could start to feel disruptions in supply caused by the March 11 natural and nuclear disasters in Japan, economists from Goldman Sachs wrote in a research report.In the United States, the report on consumer prices followed one on prices for wholesalers on Thursday. In that report, the Labor Department said higher energy costs accounted for almost all of the increase in the Producer Price Index, which was up 0.7 percent in March, when prices for a barrel of crude oil reached levels not seen since September 2008, partly as turmoil in the Middle East heightened perceptions that supplies could be disrupted.

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Filed Under: Business News Tagged With: feeling the pinch, food prices, labor department

Higher Energy Costs Push Up Producer Prices

April 14, 2011 by NewsMaker Leave a Comment

WASHINGTON (AP) — More expensive gas, cars and furniture pushed wholesale prices higher last month.

The Labor Department said Thursday that its Producer Price Index, which measures price changes before they reach the consumer, rose 0.7 percent in March. That was down from a 1.6 percent rise in February. The index has increased 5.8 percent in the last year.

Excluding food and energy, the core index rose 0.3 percent in March — the second highest increase in the last year.

The price of new cars rose by the most in nearly two years, while the cost of some types of furniture jumped 6.5 percent. Still, core prices are only up 1.9 percent over the last year, a relatively tame rate of inflation.

Higher energy prices accounted for nearly all of the March increase. Gas prices jumped 5.7 percent in March. Food prices dipped last month, after soaring by the most in 36 years in February because of a harsh winter freeze that raised the cost of fresh vegetables. Egg prices dropped 20 percent.

Economists say rising oil and gas prices could slow the economy, leaving consumers with less money to spend on other goods. But average hourly pay has only risen 1.7 percent in the last year, a fact that is likely to keep inflation from spreading.

Employers have little incentive to raise pay when the unemployment rate is high. But businesses are also unlikely to raise prices by much if they sense people cannot afford to pay the added costs.

The government also reported Thursday that more people applied for unemployment benefits last week, the first increase in three weeks. Still, the broader trend points to a slowly healing jobs market.

Applications for unemployment benefits rose 27,000 to a seasonally adjusted 412,000 for the week that ended April 9. That left applications at their highest point since mid-February.

Applications near 375,000 are consistent with a sustained increase in hiring. Applications peaked during the recession at 659,000.

The four-week average of applications, a less volatile measure, rose to 395,750. Applications have dropped by about 6 percent over the last two months.

Companies added more than 200,000 jobs in March for a second month, the first time that has happened since 2006. The unemployment rate fell to a two-year low of 8.8 percent and has dropped a full percentage point since November.

However, a more sobering reason for the drop is that the number of people who are either working or seeking a job is surprisingly low for this stage of the recovery. People without jobs who are not looking for one are not counted as unemployed.

The number of people collecting benefits fell to 3.68 million during the week ended April 2, one week behind the applications data. That was the lowest total since late September 2008.

That does not include millions of people receiving aid under the emergency unemployment benefits programs put in place during the recession.

Overall, 8.5 million people received unemployment benefits in the week ending March 26, the latest data available. That was down slightly from the previous week.

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Filed Under: Business News Tagged With: harsh winter, labor department, oil and gas prices