David Kirkpatrick

October 28, 2010

Want to know where some of those missing jobs are?

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 6:56 pm

A great place to start looking is corporate balance sheets.

From the link:

US companies are hoarding almost $1 trillion in cash but are unlikely to spend on expanding their business and hiring new employees due to continuing uncertainty about the strength of the economy, Moody’s Investors Service said on Tuesday.

As the economy stabilizes companies are also more likely to spend on share repurchases and mergers and acquisitions, Moody’s (MCO: 26.60 ,-0.54 ,-1.99%) added.

Companies cut costs, reduced investment in plants and equipment and downsized operations in order to boost cash holdings during the recession.

As the corporate bond market reopened many companies also boosted cash levels by selling debt and refinancing near-term debt maturities.

Nonfinancial U.S. companies are sitting on $943 billion of cash and short-term investments, as of mid-year 2010, compared with $775 billion at the end of 2008, Moody’s said.

This would be enough to cover a year’s worth of capital spending and dividends and still have $121 billion left over, it said.

However, “we believe companies are looking for greater certainty about the economy and signs of a permanent increase in sales before they let go of their cash hoards, which they suffered so much to build,” Moody’s said in a report.

“Given low demand and capacity utilization within certain industries, companies are wary of investing their cash in new capacity and adding workers, thereby doing little to abbreviate the jobless recovery,” it added.



December 3, 2009

Wait a sec on that dire unemployment news …

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 1:55 pm

The most recent Beige Book from the Fed finds unemployment the big problem in the current economy, but maybe better times are coming sooner than later. I’m still not going to hold my breath.

From the second link:

The number of U.S. workers filing new applications for jobless insurance unexpectedly fell last week to the lowest level in more than 14 months, government data showed on Thursday, pointing to a moderation in the pace of job losses.

Initial claims for state unemployment benefits slipped 5,000 to a seasonally adjusted 457,000 in the week ended November 28 from a downwardly revised 462,000 in the prior week, the Labor Department said. Claims have dropped for five consecutive weeks.

Analysts polled by Reuters had forecast claims rising to 480,000 from a previously reported 466,000.

The report covers the Thanksgiving holiday and a Labor Department economist said both actual and seasonally adjusted claims were down.

September 4, 2009

Jobless recovery = Main Street killer

Filed under: Business, Politics — Tags: , , , , , — David Kirkpatrick @ 1:43 pm

When the economy gets back on track through a “jobless recovery,” the overall result is most people don’t see, feel or believe any evidence things are better in some esoteric “big picture” fashion.

An enduring recovery that remains jobless could be a real political boon to the GOP for the 2010 election cycle if the party could get away from the lampoonable stunt-pulling and histrionics that so far characterize the opposition party.

From the link:

As a technical matter, most economists believe that the United States has escaped the grip of recession, the longest since the Great Depression. The Labor Department’s latest employment report, released Friday, added weight to the view that economic expansion has resumed, marking a continued albeit modest improvement to the rate of lost jobs.

Yet the report also lent credence to a growing consensus that the recovery is likely to be weak and fragile, prompting most companies to hold back from hiring aggressively.

“In the context of a full-blooded recovery, this report is disappointing,” said Alan Ruskin, an economist with the Royal Bank of Scotland in Stamford, Conn. “We’re still clawing our way back.”

Many experts now see a high probability of another so-called jobless recovery, in which the economy expands but jobs continue to disappear — a replay of what happened after the last recession in 2001.