March 23, 2023

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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Media Decoder Blog: ‘Vine Talk’ Participants Complain of Not Being Paid

On the syndicated public television show “Vine Talk,” the actor Stanley Tucci leads a changing cast of chefs and celebrities in a convivial round of wine tasting. But off-camera, many of the show’s participants are battling over money they say is still owed to them.

The show, produced by Jersey Wooly Productions and broadcast on stations nationwide since April, rented WNET’s new Lincoln Center studio to tape a first season last winter. But the New York City public broadcaster, which has already weathered a couple of tough financial years, has not been paid about $500,000, according to several people briefed on the matter who would not discuss it publicly.

A WNET spokeswoman, Kellie Specter, declined to comment, and Bruce Marcus, Jersey Wooly Productions’ chief executive, disputed the figure.
Joe Locarro, the program’s director and an executive producer, said in a telephone interview that he was owed “in the six figures.” Mr. Marcus, he said, has “told me that he’s had a number of people that are interested in sponsoring the show and investing in the show. Why these people have not come to fruition I do not know.” He added that he had been working for six months to get the show’s crew paid, which they were last week.

Mr. Tucci declined to comment through his publicist, Jennifer Plante, “on the advice of counsel.” She said, in a statement, that “Mr. Tucci and his production company are reviewing their legal options regarding Vine Talk’s lead producer and originator.” Mr. Tucci, the actor Steve Buscemi and the producer Wren Arthur, through their company Olive Productions, were also executive producers.

Mr. Buscemi’s publicist, Staci Wolfe, said in a statement: “Olive hasn’t been paid, Stanley has only received a small portion of his fee, and they have withdrawn from the project for that reason.”

Mr. Marcus, in a telephone interview, declined to say how much money was owed, but said it would all be paid.
“We’re still in the process of Season 1 and still bringing money into the project. We do have payables still getting paid, slowly but surely,” he said, adding, “There’s no doubt the economy has impacted our ability to bring in money over the past year.”

Riki Kane, founder of the show’s sole corporate sponsor, Metrokane, said, “The show has been tremendous for us.” She said the company would hope to sponsor a second season, and Mr. Marcus said he was already planning for it while he was trying to pay off the first season.

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Murdochs’ Infighting Clouds Future of News Corp.

But behind that facade, the disclosure of widespread phone hacking at News Corporation’s British newspaper division was only the latest and most serious episode to test a father-son relationship that has frayed over the last few years, leaving both men at times not even on speaking terms. And that rift, which has been known only to those closest to the company, has opened up a question central to Rupert Murdoch’s legacy — can one of his children ever take the helm of his $62 billion media giant?

Their disagreements, which were described in detail by more than half a dozen former and current company officials and others close to the Murdochs, stemmed in large part from the clashing visions of a young technocratic student of modern management and a traditionalist who rules by instinct and conviction. The tension grew worse as the gap between the New York headquarters and James’s London operations, where he oversees the company’s European and Asian holdings, proved difficult to bridge.

The elder Mr. Murdoch reached his boiling point last winter, said one of the former officials, and delivered a blunt ultimatum to his son.

“You’re coming back to New York, or you’re out.”

The son consented. But now, as investors place more pressure on the Murdochs to disentangle themselves from the company they have tightly controlled for three generations, his role in the company is under threat. Shareholders will meet on Friday in Los Angeles to decide whether to re-elect the News Corporation board, which includes Rupert, James and Lachlan Murdoch, the eldest son. Though the family holds a 40 percent stake, giving the Murdochs effective control, and most analysts expect them to be re-elected, several large shareholders and a prominent investor advisory firm have recommended voting against them.

James Murdoch, 38, who approved a settlement in 2008 of more than $1 million to help resolve allegations of voice mail hacking at News of the World, the tabloid that News Corporation shut down in July, faces additional pressure back home in London. He is scheduled to testify before Parliament for a second time next month to address questions about the payment, with several ministers suggesting that it was part of an intentional cover-up of the phone hacking.

Within the company, James’s position became tenuous enough at one point this summer that he and other senior executives considered whether he should step aside, said one person with knowledge of the conversations.

Both Murdochs, through representatives, declined interview requests.

Rupert Murdoch, now 80, has long said he hopes one of his children will eventually run the company he built from an Australian newspaper franchise into one of the world’s most powerful and profitable media empires. With his daughter Elisabeth focused on her television production company in London, and Lachlan determined to continue running his media business in Sydney despite the elder Murdoch’s desire to bring him back into the company, James has been the heir apparent. But the hacking scandal and the simmering animosity with his father have destabilized his once inexorable ascent within the company.

“Rupert always thought of News Corp. as a family company because it had been given to him,” said Barry Diller, who helped the elder Mr. Murdoch build Fox into a formidable rival to the traditional networks. “It had been given to him through a tiny newspaper in Adelaide, but nevertheless it was his father’s company. I think that meant to him that tradition should continue. If, as he’s always said, his children were worthwhile.”

Succession Twist

James was not always viewed as the Murdoch who would end up running News Corporation. That mantle, it seemed to everyone inside the company, belonged to Lachlan. James, the youngest of Rupert’s four adult children, was a willful child. When he was served last at dinner, as was the family custom for the last born, James strenuously objected and, according to the Murdoch biographer Neil Chenoweth, repeatedly tried to rearrange the seats around the table.

He attended Harvard, but in 1994 dropped out to start a hip-hop record label, Rawkus, which News Corporation bought two years later.

Bill Carter contributed reporting.

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Media Decoder: News Corporation Sells MySpace for $35 Million

DESCRIPTIONJin Lee/Bloomberg

6:30 p.m. | Updated MySpace, the long-suffering Web site which the News Corporation bought six years ago for $580 million, was sold on Wednesday to the advertising targeting firm Specific Media for roughly $35 million.

The News Corporation, which is controlled by Rupert Murdoch, had been trying since last winter to rid itself of the unprofitable unit, which was a casualty of changing tastes and a cautionary tale for social companies like Zynga and LinkedIn that are presently enjoying sky-high valuations.

Relief over the sale was palpable on Wednesday, and not just at News Corporation: Wall Street “just wanted it done, because it’s been a real drag on growth,” said Michael Nathanson, a media sector analyst for Nomura Securities.

Terms of the deal were not disclosed, but the News Corporation said that it would retain a minority stake. Specific Media said it had brought on board the artist Justin Timberlake as a part-owner and an active player in MySpace’s future, but said little else about how the site would change.

The sale closes a complex chapter in the history of the Internet and of the News Corporation, which was widely envied by other media companies when it acquired MySpace in 2005. At that time, MySpace was the world’s fastest-growing social network, with 20 million unique visitors each month in the United States. That figure soon soared to 70 million, but the network could not keep pace with Facebook, which overtook MySpace two years ago.

As users fled MySpace, so, too, did advertisers. The market research firm eMarketer estimates that the site will earn about $183 million in worldwide ad revenue this year, down from $605 million at its peak, when the site introduced many Web users and many advertisers to the concept of social networking.

“It’s a shame that MySpace’s value has diminished so severely since the acquisition; MySpace’s pioneering of social networking (now referred to as social media) will always be revered as igniting a new medium,” Richard Rosenblatt, the chairman of MySpace at the time of the sale to the News Corporation, said in an e-mail.

Instead of envy, News Corporation’s bet on MySpace now provokes punch lines. Tom Freston, who was fired as the chief executive of Viacom in part for failing to buy MySpace, joked in an interview with CNBC earlier this year that “I’m still waiting for a thank you note” from the Viacom chairman, Sumner Redstone.

Mr. Freston, who was in Iceland on Wednesday and was smiling at the news of an impending sale, declined to comment.

News Corporation executives declined interview requests on Wednesday.

It is not clear whether MySpace itself was profitable for the company; the division that houses MySpace and other digital properties has turned a profit only once in the last six years. An advertising deal with Google helped the company to recoup what it spent on MySpace in the first place, but the site became a burden on the company’s earnings; by last year executives were calling the losses unacceptable. Mr. Nathanson called it a “headache.”

What doomed the site? Lee Brenner, the former director of MySpace’s “Impact” section who is now the publisher of HyperVocal, wrote in a blog post Tuesday, “I’m sure most employees (former or current) will argue that it was poor management, or a need to hit revenue targets once News Corp. took over, or a bottleneck in the technology department, or lack of resources given to their division, or a poor public relations effort, etc., that set the course of MySpace’s downfall.

“Any number of these could be true,” Mr. Brenner wrote. “I suppose we’ll never know for sure. It is most likely a combination of these factors, along with a ‘low attention span’ public. It probably didn’t help to be doing business, and trying to grow, along with all of these issues, in the midst of a global economic crisis.”

MySpace has attempted to reboot itself several times, most recently as a social destination for music, movies and other media. It has not been abandoned altogether; it still has 35 million visitors a month in the United States, according to the measurement firm ComScore. Facebook has 157 million visitors a month in the United States.

“It’s still one of the biggest pockets of traffic on the Internet, for the price,” said a former MySpace executive who insisted on anonymity in order to maintain friendships and business relationships with News Corporation.

Mr. Timberlake said in a statement about the sale that MySpace still has the potential to be the place on the Web where “fans can go to interact with their favorite entertainers, listen to music, watch videos, share and discover cool stuff and just connect.”

Many of the current and former MySpace users who reacted to Wednesday’s sale thought differently — some lumped it in with Friendster as a dead social network and others compared it to a shopping mall that no one visits anymore.

In preparation for the change in ownership, many of MySpace’s roughly 400 employees were dismissed on Wednesday. Mike Jones, the Web site’s chief executive, said in an internal memorandum that he would depart in the next two months.

“Today should be a day,” Sean Percival, a vice president at MySpace, wrote on Twitter on Wednesday morning, ahead of the sale announcement.

Later in the day, he followed up, telling his online followers that Wednesday would be his last day at the company. Seemingly referring to the site’s rise and fall, he wrote, “It was a unique moment in time and an impossible problem to solve. Was proud to be a part of it.”

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Media Decoder: CNBC’s Burnett Is Said Ready to Jump to CNN

The CNBC anchor Erin Burnett is poised to sign a long-term contract with CNN, according to three people with knowledge of her plans.

The signing will represent a shift to general news anchoring for Ms. Burnett, who has shown interest in branching out beyond business news, CNBC’s specialty. It is unclear what time slot she will occupy at CNN.

Ms. Burnett, who was considered a rising star within CNBC and its parent, NBCUniversal Media, held talks with two broadcast networks, ABC and CBS, before deciding to join CNN, according to two of the people. They insisted on anonymity because the deal had not been made public.

A spokeswoman for CNN, a unit of Time Warner, declined comment on Wednesday night.

Ms. Burnett has been an anchor at CNBC since 2005. Before then, she worked at Goldman Sachs, Citigroup and Bloomberg Television. Currently she is a co-anchor of “Squawk on the Street” on weekdays from 9 to 11 a.m. Eastern Time and the sole anchor of “Street Signs” from 2 to 4 p.m.

That means that CNBC, the country’s dominant business news channel, will have a lot of air time to fill without her.

There has been speculation inside CNBC for several weeks that Ms. Burnett was considering leaving. Amid that speculation, the channel hired the Fox Business anchor Brian Sullivan two weeks ago but did not announce a time slot for him. A CNBC spokesman declined to comment on Wednesday night.

Ms. Burnett could end up with an afternoon or evening time slot on CNN, which is trying to rejuvenate itself after several years of sagging ratings.

Her agent, John Ferriter of Octagon Entertainment, also shepherded
Piers Morgan to CNN. Mr. Morgan replaced
Larry King in the channel’s 9 p.m. time slot last winter.

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