David Kirkpatrick

June 1, 2010

The recession and the unemployment benchmark

The question is did the recession push the unemployment benchmark to around seven percent, and if so will the Fed do damage to an already fragile economy by sticking with the previous benchmark of around five percent.

Certainly food for economic thought.

From the link:

Federal Reserve policy makers say full employment means a long-term jobless rate between 5 percent and 5.3 percent. Some of the most influential economists say they’re wrong.

Dean Maki at Barclays Capital, 2006 Nobel Prize-winner Edmund Phelps and Bank of America-Merrill Lynch’s Ethan Harris estimate the worst financial crisis since the Great Depression has pushed the so-called natural rate of unemployment to between 6.3 percent and 7.5 percent. Unless the Fed accepts that more Americans will be permanently out of work, the central bank may spur inflation by waiting too long to raise its benchmark rate from a record low, said Maki, Barclays’ chief U.S. economist and the most accurate forecaster in a December 2009 Bloomberg News survey.

August 26, 2009

Jobs aren’t recovering with economy

Filed under: Business — Tags: , , , , , — David Kirkpatrick @ 6:14 pm

Not exciting news, and the title’s probably a little bit misleading since it should read something closer to “don’t expect jobs to recover along with the economy once the economy really starts recovering.” Or something along those sobering lines.

From the link:

The mood regarding the U.S. economy may be inching, ever so slowly, toward optimism. But don’t expect to see much improvement on the jobs front anytime soon. The economy’s following a script for a jobless recovery, and unemployment is likely to stay high, if not get slightly worse.The Congressional Budget Office painted a worsening picture for joblessness on Tuesday: The CBO sees unemployment peaking at 10.4% next year from an average of 9.3% this year, before it falls to 9.1% in 2011.

So how can there be a recovery without job growth to go with it?

To start, companies were unusually quick on the trigger initiating massive layoffs during this downturn. But they’re unlikely to be equally zealous about hiring people back, especially since productivity is so high right now. The Labor Department reported that non-farm productivity grew at a 6.4% annual rate in the second quarter, the largest gain since the third quarter of 2003.

May 29, 2009

Reading these economic indicators …

… might have less worth than reading tea leaves or engaging in navel gazing. Like most numbers they can be spun up, down or sideways, but anyone seeing blue skies and smelling roses from these reports has given up and started taking antidepressants.

From the link:

The economy is sending a message of hope laced with caution: That the recession is steadily easing, but new threats could delay any recovery.One piece of heartening news was that the number of people seeking first-time jobless aid fell last week, a sign companies are cutting fewer workers.

And even though sales of newly built homes were flat last month, the figures suggested that the battered U.S. real estate market is nearing a gradual comeback.

But pessimists could point to bleaker news Thursday: The number of people continuing to receive unemployment benefits rose to 6.78 million _ the largest total on records dating to 1967 and the 17th straight record-high week.

The figure signaled that the jobless rate, which reached 8.9 percent in April, will rise in May, economists said. And many economists expect the rate to approach 10 percent by year’s end.

Another worrisome sign is that a record 12 percent of homeowners with a mortgage are behind on their payments or in foreclosure as the housing crisis spreads to borrowers with good credit, the Mortgage Bankers Association said. And the wave of foreclosures isn’t expected to crest until the end of next year.

April 30, 2009

Unemployment news

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 2:58 pm

Not so good.

From the link:

Unemployment rates rose in all of the nation’s largest metropolitan areas for the third straight month in March, with Indiana’s Elkhart-Goshen once again logging the biggest gain.

The Labor Department reported Wednesday all 372 metropolitan areas tracked saw jobless rates move higher last month from a year earlier. Elkhart-Goshen’s rate soared to 18.8 percent, a 13 percentage-point increase. That was the fourth-highest jobless rate in the country.

The Indiana region has been hammered by layoffs in the recreational vehicle industry. RV makers Monaco Coach Corp. Keystone RV Co. and Pilgrim International have sliced hundreds of jobs.

The jobless rate jumped to 17 percent in Bend, Ore., a 9.2 percentage-point rise and the second-biggest monthly gainer. Bend for years has been the center of the central Oregon real estate and construction boom, largely fueled by retirees from California. Many of them bought vacation or retirement homes in high-end rural developments called destination resorts, which the state began allowing in 1984 as an exception to land use laws that otherwise aim to preserve rural land from development.

And if you want more food for not so happy thoughts:

Unemployment rates in 109 metropolitan areas reached 10% or higher in March, almost eight times more than a year earlier, according to a government report released Wednesday.

Just 14 cities reported jobless rates of at least 10% last year, the Labor Department said.

The March 2009 report said unemployment rates in all of the nation’s 372 metropolitan areas rose in March compared with the same month in the prior year.

Jobless rates of at least 15% were reported in March in 18 areas, compared with only one – El Centro, Calif. – the previous year.

The number of metropolitan regions that had unemployment rates under 7% dropped significantly to 95 from 329 in March 2008.

A total of 33 metro areas registered unemployment rates that were at least 6 percentage points higher than a year ago, and another 42 areas’ increases were 5 to 5.9 percentage points.

January 2, 2009

No economic respite in sight

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 7:57 pm

Of course this what everyone is expecting. I’ve blogged this phrase more than twice, but it bears repeating — everyone with a real dog in the fight right now is saying just write 2009 off, ride it out as best you can and hope for some clarity in 2010.

This doesn’t necessarily mean sour faces and cardboard shoes — sometimes tough times aren’t nearly so bad when you’re prepped for them. It’s the unseen haymaker that really hurts. So stiff upper lip, watch the wanton spending and don’t panic. Things will be better, and I bet they’ll be practically fine. Especially when viewed through rose-colored glasses.

From the link:

The number of laid-off workers continuing to draw unemployment benefits bolted to 4.5 million in late December, and even more Americans are expected to join the ranks of the jobless in 2009.

While first-time applications for jobless benefits dropped last week, economists mostly attributed that to the Christmas holiday and cautioned that a more accurate picture of new layoff filings won’t become clear until the holiday season is passed _ around mid-January.

All in all, though, the picture that emerged Wednesday was largely grim and is not expected to improve any time soon.

“It wasn’t a very merry Christmas for most of the labor force and it doesn’t look like it will be a very happy New Year, either,” said Richard Yamarone, economist at Argus Research.

The Labor Department’s report showed that people continuing to draw unemployment benefits jumped by 140,000 to 4.5 million for the week ending Dec. 20, the most recent period for which that information is available. The larger-than-expected increase underscored the difficulties the unemployed are having in finding new jobs.

December 5, 2008

Jobless news not good

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 11:01 am

The jobless issue is still dark boding for a tough holiday season.

These numbers don’t even reflect 637,000 people who’ve effectively given up and have “dropped out of the workforce” meaning even though they aren’t employed, they’re not “jobless” because they aren’t even trying to get a job any longer.

From the link:

With the economy deteriorating rapidly, the nation’s employers shed 533,000 jobs in November, the 11th consecutive monthly decline, the government reported Friday morning, and the unemployment rate rose to 6.7 percent.

The decline, the largest one-month loss since December 1974, was fresh evidence that the economic contraction accelerated in November, promising to make the current recession, already 12 months old, the longest since the Great Depression. The previous record was 16 months, in the severe recessions of the mid-1970s and early 1980s.

October 2, 2008

Bailout news, jobless rate, short selling and rate cuts — oh, my

I’ve done a lot of blogging on the bailout and derided this ongoing process — including banning shorting some stocks (see more below on this) — as “corporate socialism.” I still don’t like the bailout, but now that the Senate passed its revised version I’m guessing the House will go along tomorrow unless the GOP stalwarts feel particularly feisty.

From the second link:

House members are getting another chance to vote on a financial bailout bill that has infuriated millions of voters after the Senate added tax cuts and other sweeteners and passed it handily.

Senators advanced the much-criticized measure in a 74-25 vote late Wednesday, sending it to the other side of the Capitol for a showdown vote expected Friday. The move was calculated to win over enough dissenting House members to get the bill through and reverse Monday’s stunning defeat in the House, party leaders there planned to press rank-and-file members Thursday for the dozen converts they believe they need.

But bailout news isn’t the only story with this ongoing financial crisis. Go below the fold for more on the jobless rate, the latest on shorting and possible additional rate cuts.

(more…)

August 4, 2008

Jobless rate climbs

Filed under: Business, Politics — Tags: , , , — David Kirkpatrick @ 6:05 pm

Bad news for the economy, and I’d think pretty bad news for McCain as well.

From the link:

The unemployment rate in the United States climbed to a four-year high of 5.7 percent in July as employers cut 51,000 jobs, dashing the hopes of an influx of young people looking for summer work.

Payroll cuts, however, weren’t nearly as deep as the 72,000 economists were forecasting. And, job losses for both May and June were smaller than previously reported.

July’s reductions marked the seventh straight month where employers eliminated jobs. So far, this year, the economy has lost a total of 463,00 jobs.

The latest snapshot, released by the Labor Department on Friday, showed that employers remain cautious as a lack of credit stunts their expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.

The increase in the unemployment rate to 5.7 percent, from 5.5 percent in June, in part came as many young people streamed into the labor market looking for summer jobs. This year, however, fewer of them were able to find work, the government said. The unemployment rate for teenagers jumped to 20.3 percent, the highest since late 1992.