.
Soaring U.S. Unemployment Threatens Path to Economic Recovery
http://www.bloomberg.com/apps/news?pid=20601087&sid=af34srfRSY94&pos=1
Timothy R. Homan
Nov. 7 (Bloomberg) -- The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, threatening the emerging economic recovery and giving President Barack Obama and Democrats a bigger hurdle to overcome before next year’s Congressional elections.
Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed yesterday in Washington. The jobless rate rose from 9.8 percent in September. Factory payrolls dropped by the most in four months, and the average workweek held at a record low.
Treasury two-year notes rallied on bets the Federal Reserve is more likely to maintain its pledge to keep interest rates near zero. The figures prompted Obama, who signed a bill yesterday extending jobless benefits, to promise new measures to find jobs for some of the 15.7 million unemployed Americans.
“This will have a chilling effect on consumer confidence and business confidence,” said Joseph Brusuelas, a director at Moody’s Economy.com in West Chester, Pennsylvania. “It does look like unemployment will creep much higher.”
Two-year note yields dropped to 0.85 percent late yesterday, and touched the lowest level since May. The Standard & Poor’s 500 Stock Index rose 0.3 percent to close at 1,069.3, after falling as much as 0.7 percent.
Payrolls were forecast to drop 175,000 after an initially reported 263,000 decline for September, according to the median estimate of 84 economists surveyed by Bloomberg News. The jobless rate was projected to rise to 9.9 percent.
Homebuyer Tax Credit
Obama signed into law a measure extending a tax credit of up to $8,000 for homebuyers and benefits for unemployed workers. He promised to pursue further measures to create jobs.
“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said yesterday at the White House.
For congressional Democrats facing challengers in midterm elections next year, the continuing erosion in the job market puts them at risk. Voters on Nov. 3 overwhelmingly cited unease with the economy and worries about jobs as they ousted the Democratic governor of New Jersey and installed a Republican governor in Virginia after eight years of Democratic rule there. Obama carried both states in 2008.
The U.S. economy has lost 7.3 million jobs since the recession began in December 2007, when the unemployment rate stood at 4.9 percent. Since Obama took office in January, the economy has lost 3.49 million jobs.
Obama Stimulus
The administration said last week that the $787 billion stimulus package plan signed into law in February was directly responsible for saving or creating about 640,000 jobs.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 17.5 percent in October from 17 percent, yesterday’s report showed.
“We’ve got lots of people just giving up and leaving the labor force,” said Julia Coronado, a former Fed economist now at BNP Paribas in New York. “Consumer incomes are under pressure, and that raises questions about the sustainability of the improvement we’ve seen in consumer spending.”
Johnson & Johnson, the world’s largest health-products company, is among those cutting payrolls amid concern spending will cool as government-assistance programs wane. The New Brunswick, New Jersey-based company said Nov. 3 it will shrink its workforce by as much as 7,000 workers.
Record-Low Week
The average work week held at a record low of 33 hours in October. Average weekly earnings rose to $617.76 from $616.11 a month earlier. Workers’ average hourly earnings were 2.4 percent higher than October 2008, the smallest gain since 2004.
Factory payrolls dropped 61,000 after decreasing 45,000 in September, yesterday’s report showed. The median forecast by economists called for a drop of 42,000. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.
Sales of cars and light trucks rebounded last month after plunging in the wake of the government’s so-called cash-for- clunkers incentive plan. Vehicles sold at a 10.5 million annual pace in October, up from a 9.2 million rate in September.
Yesterday’s report contained some bright spots. Revisions added 91,000 to payroll figures previously reported for September and August, and the number of temporary workers rose by 34,000, the third consecutive gain.
Temporary Help
Payrolls at temporary-help agencies often turn up before total employment because companies are not certain increases in demand will be sustainable enough to warrant the expense of taking on permanent staff.
Builders cut payrolls by 62,000 after a loss of 68,000 in September. Financial firms cut payrolls by 8,000, after 9,000 reductions the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 61,000 workers after cuts of 105,000 the prior month. Retail payrolls decreased by 39,800 after a decline of 44,200.
The U.S. economy expanded last quarter for the first time in a year, growing at a 3.5 percent pace as government incentives spurred more consumers to buy homes and automobiles.
.
Soaring U.S. Unemployment Threatens Path to Economic Recovery
http://www.bloomberg.com/apps/news?pid=20601087&sid=af34srfRSY94&pos=1
Timothy R. Homan
Nov. 7 (Bloomberg) -- The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, threatening the emerging economic recovery and giving President Barack Obama and Democrats a bigger hurdle to overcome before next year’s Congressional elections.
Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed yesterday in Washington. The jobless rate rose from 9.8 percent in September. Factory payrolls dropped by the most in four months, and the average workweek held at a record low.
Treasury two-year notes rallied on bets the Federal Reserve is more likely to maintain its pledge to keep interest rates near zero. The figures prompted Obama, who signed a bill yesterday extending jobless benefits, to promise new measures to find jobs for some of the 15.7 million unemployed Americans.
“This will have a chilling effect on consumer confidence and business confidence,” said Joseph Brusuelas, a director at Moody’s Economy.com in West Chester, Pennsylvania. “It does look like unemployment will creep much higher.”
Two-year note yields dropped to 0.85 percent late yesterday, and touched the lowest level since May. The Standard & Poor’s 500 Stock Index rose 0.3 percent to close at 1,069.3, after falling as much as 0.7 percent.
Payrolls were forecast to drop 175,000 after an initially reported 263,000 decline for September, according to the median estimate of 84 economists surveyed by Bloomberg News. The jobless rate was projected to rise to 9.9 percent.
Homebuyer Tax Credit
Obama signed into law a measure extending a tax credit of up to $8,000 for homebuyers and benefits for unemployed workers. He promised to pursue further measures to create jobs.
“My economic team is looking at ideas such as additional investments in our aging roads and bridges, incentives to encourage families and business to make buildings more energy efficient,” additional tax cuts, and more steps to ease the flow of credit to small business and promote exports, he said yesterday at the White House.
For congressional Democrats facing challengers in midterm elections next year, the continuing erosion in the job market puts them at risk. Voters on Nov. 3 overwhelmingly cited unease with the economy and worries about jobs as they ousted the Democratic governor of New Jersey and installed a Republican governor in Virginia after eight years of Democratic rule there. Obama carried both states in 2008.
The U.S. economy has lost 7.3 million jobs since the recession began in December 2007, when the unemployment rate stood at 4.9 percent. Since Obama took office in January, the economy has lost 3.49 million jobs.
Obama Stimulus
The administration said last week that the $787 billion stimulus package plan signed into law in February was directly responsible for saving or creating about 640,000 jobs.
The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- reached a record 17.5 percent in October from 17 percent, yesterday’s report showed.
“We’ve got lots of people just giving up and leaving the labor force,” said Julia Coronado, a former Fed economist now at BNP Paribas in New York. “Consumer incomes are under pressure, and that raises questions about the sustainability of the improvement we’ve seen in consumer spending.”
Johnson & Johnson, the world’s largest health-products company, is among those cutting payrolls amid concern spending will cool as government-assistance programs wane. The New Brunswick, New Jersey-based company said Nov. 3 it will shrink its workforce by as much as 7,000 workers.
Record-Low Week
The average work week held at a record low of 33 hours in October. Average weekly earnings rose to $617.76 from $616.11 a month earlier. Workers’ average hourly earnings were 2.4 percent higher than October 2008, the smallest gain since 2004.
Factory payrolls dropped 61,000 after decreasing 45,000 in September, yesterday’s report showed. The median forecast by economists called for a drop of 42,000. The decline included a gain of 4,600 jobs in auto manufacturing and parts industries.
Sales of cars and light trucks rebounded last month after plunging in the wake of the government’s so-called cash-for- clunkers incentive plan. Vehicles sold at a 10.5 million annual pace in October, up from a 9.2 million rate in September.
Yesterday’s report contained some bright spots. Revisions added 91,000 to payroll figures previously reported for September and August, and the number of temporary workers rose by 34,000, the third consecutive gain.
Temporary Help
Payrolls at temporary-help agencies often turn up before total employment because companies are not certain increases in demand will be sustainable enough to warrant the expense of taking on permanent staff.
Builders cut payrolls by 62,000 after a loss of 68,000 in September. Financial firms cut payrolls by 8,000, after 9,000 reductions the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 61,000 workers after cuts of 105,000 the prior month. Retail payrolls decreased by 39,800 after a decline of 44,200.
The U.S. economy expanded last quarter for the first time in a year, growing at a 3.5 percent pace as government incentives spurred more consumers to buy homes and automobiles.
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(¸.•´ (¸.•` ¤ CRAIG MAXIM
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(¸.•´ (¸.•` ¤ CRAIG MAXIM
Facebook: http://facebook.com/craigmaxim
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I,ve had one day off in three weeks. 
