Even as the American economy shows tentative signs of a rebound, the human toll of the recession continues to mount, with millions of Americans remaining out of work, out of savings and nearing the end of their unemployment benefits.

Economists fear that the nascent recovery will leave more people behind than in past recessions, failing to create jobs in sufficient numbers to absorb the record-setting ranks of the long-term unemployed.

Call them the new poor: people long accustomed to the comforts of middle-class life who are now relying on public assistance for the first time in their lives — potentially for years to come.

Yet the social safety net is already showing severe strains. Roughly 2.7 million jobless people will lose their unemployment check before the end of April unless Congress approves the Obama administration’s proposal to extend the payments, according to the Labor Department.

Source/Full Story: NYTimes.com

Walmart has suffered its first fall in quarterly sales at its US discount stores, underlining the challenges facing future growth in its home market as the economy recovers.

During the important holiday quarter ending on January 31, net sales at Walmart’s 3,400 plus US stores fell 0.5 per cent year-on-year to $71bn, while comparable store sales declined 2 per cent. Customer traffic also fell.

The retailer blamed price deflation in food and electronics for lowering the overall value of its sales, as well as the impact of store refurbishment.

The decline contrasted with the strong sales and traffic growth during its first three quarters, as low prices attracted new budget-minded shoppers.

Tom Schoewe, chief financial officer, argued that the declines did not mean Walmart was losing some of the customers it had gained during the recession, saying the “modest decline” in traffic was “not in our mind an indication of trend”.

He highlighted the cautious mood of Walmart’s largely low-income shoppers, saying there was still a high level of anxiety over unemployment.

Source/Full Story: FT.com

It’s not the signal it used to be.

When employers hire temporary staff after a recession, it’s long been seen as a sign they’ll soon hire permanent workers.

Not these days.

Companies have hired more temps for four straight months. Yet they remain reluctant to make permanent hires because of doubts about the recovery’s durability.

Even companies that are boosting production seem inclined to get by with their existing workers, plus temporary staff if necessary.

“I think temporary hiring is less useful a signal than it used to be,” says John Silvia, chief economist at Wells Fargo. “Companies aren’t testing the waters by turning to temporary firms. They just want part-time workers.”

Source/Full Story: msnbc.com

A majority of companies in the Standard & Poor’s 500 stock index increased cash to a combined $1.19 trillion while simultaneously reducing spending, keeping a jobs recovery on hold.

Caterpillar Inc., Eaton Corp., Walgreen Co. and General Electric Co. are among 260 companies that ended last quarter with $522 billion more than a year earlier after cutting capital spending by 42 percent. Economists say the dearth of investment is keeping the jobless rate at about 10 percent as the U.S. emerges from its worst recession since the 1930s.

“It’s not clear we are going to see the type of growth following this recession that we’ve seen in previous recessions,” Sandy Cutler, Eaton’s chief executive officer, said in an interview yesterday. That view “is leading people to be cautious as to their rate of reinvestment, and right in parallel with that, in terms of hiring additional employees.”

Source/Full Story: Bloomberg.com

The unemployment rate dropped unexpectedly in January to 9.7
percent, while employers shed 20,000 jobs, according to a report that
offered hope the economy will add jobs soon.

The unemployment rate dropped from 10 percent because a survey of
households found the number of employed Americans rose by 541,000, the
Labor Department said Friday. The job losses are calculated from a
separate survey of employers.

The department also revised its past employment estimates to show
that job losses from the Great Recession have been much worse than
previously stated. The economy has shed 8.4 million jobs since the
downturn began in December 2007, up from a previous figure of 7.2
million.

That’s the most jobs lost in any recession, as a percent of total employment, since World War II.

The figure for November was revised higher, however, to show a gain
of 64,000 jobs. That was initially reported as a gain of 4,000.

Source/Full Story: FOXNews.com

As bad as the government’s jobs readings numbers have been during the Great Recession, we’ll soon find out the real situation likely was worse.

Much worse.

Job losses during the recession may have been underestimated by close to a million jobs. So instead of employers cutting just over 7 million jobs from their payrolls since the economic downturn began in December 2007, it’s expected that the Labor Department’s new estimate will be a loss of 8 million jobs.

“It’s an enormous understatement of the severity of the crisis,” said Heidi Shierholz, labor economist with the Economic Policy Institute, a union-supported think tank. “It confirms that things were actually worse on the ground than what the reports suggested.”

Source/Full Story: money.cnn.com

Nouriel Roubini, the New York University professor who anticipated the financial crisis, said the U.S. growth outlook remains “very dismal” and White House economic adviser Lawrence Summers said the economy is still mired in a “human recession.”

Speaking at the World Economic Forum’s annual meeting in Davos, Switzerland, after the U.S. reported the fastest growth in six years, their comments underscored concern that that emergency measures to rescue banks and fight the recession may be withdrawn too soon.

“The headline number will look large and big, but actually when you dissect it, it’s very dismal and poor,” Roubini said in a Jan. 30 Bloomberg Television interview following a U.S. Commerce Department report that showed economic expansion of 5.7 percent in the fourth quarter. “I think we are in trouble.”

Source/Full Story: Bloomberg.com

Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly sales drop on record and highlighting the formidable hurdles facing the economy as it struggles to recover from the recession.

A second disappointing economic report yesterday showed that the number of newly laid-off workers requesting unemployment benefits rose more than expected last week.

While many economists were puzzled by the decline in retail sales, they cautioned that the December figures do not necessarily signal a big consumer pullback and could be a blip.

Source/Full Story: Philadelphia Inquirer

Europe’s unemployment rate unexpectedly increased to the highest in more than 11 years in November as companies cut costs in the wake of the worst recession in more than six decades.

Unemployment in the euro area rose to 10 percent from a revised 9.9 percent in October, the European Union statistics office in Luxembourg said today. That’s the highest since August 1998. Economists forecast a November rate of 9.9 percent after the 9.8 percent initially reported for October, a Bloomberg survey showed. The euro-area economy expanded 0.4 percent in the third quarter from the previous three months, according to a separate report.

European companies are cutting jobs and paring wages to shore up earnings battered by the global slump. While economic confidence has risen to a level last seen before the 2008 demise of Lehman Brothers Holdings Inc., a surge in energy costs and a stronger euro threaten to damp the recovery.

“We’ll probably see further gains in unemployment over the coming months, with the jobless rate peaking at 10.7 percent in the second half,” said Juergen Michels, chief euro-region economist at Citigroup Inc. in London. “That’s obviously bad news to consumers, which will be hurt by job cuts, lower wage growth and rising energy costs.”

The euro pared its gains against the dollar after the data and traded at $1.4317 at 10:31 a.m. in London, up less than 0.1 percent on the day. The yield on the German 10-year benchmark bond rose 0.2 basis point to 3.38 percent.

Source/Full Story: BusinessWeek

A record 37.2 million people, or about one out of every eight Americans, received food stamps in September, as the recession drove a surging jobless rate, according to a government report.

Recipients of the subsidy for retail-food purchases climbed 18 percent from a year earlier, according to a statement posted today on the U.S. Department of Agriculture’s Web site. Participation has set records for 10 straight months.

The government boosted food aid as unemployment soared, heading to a 26-year high of 10.2 percent in October. The jobless rate cooled to 10 percent last month, the Labor Department said on Dec. 4.

“We’ve been working to get that money out the door” to families that need assistance, Deputy Agriculture Secretary Kathleen Merrigan said last week in an interview.

Nevada had the biggest increase in food-stamp participation rates from a year earlier, surging 54 percent, followed by a 46.5 percent jump in Utah, according to the USDA. Texas had the most recipients at 3.1 million, followed by California with 2.9 million and New York with 2.6 million.

Recipients increased in every state and the District of Columbia, except Louisiana. Because of a sharp rise after Hurricanes Ike and Gustav in 2008, the number of people in Louisiana getting food stamps fell 65 percent in September from a year earlier. Gains of more than 30 percent from 2008 were reported in 18 states.

Source/Full Story: Bloomberg.com

Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, said in an interview with Reuters home prices will resume their decline by early next year as foreclosure sales pick up again.

“The housing crash is not over,” he said.

The U.S. housing market has suffered the worst downturn since the Great Depression, and its impact has rippled through the recession-hit economy as well as the rest of the world.

A setback for the hard-hit housing market could portend problems for the U.S. economy.

Home prices, as measured by the Standard & Poor’s/Case-Shiller U.S. National Home Price Index, will trough in the third quarter of 2010 after declining 38 percent, Zandi said.

The index peaked in the second quarter of 2006 and hit a trough in the first quarter of 2009, a drop of about 32 percent.

Source/Full Story: Zandi | Reuters

The number of bankruptcies across the country was 43 per cent higher in September than at the same point a year ago, government data shows.

The latest figures provided by the Office of the Superintendent of Bankruptcy Canada show the increase is disproportionately slanted towards consumer bankruptcies over business insolvencies. The September figure for the former was up by 45.5 per cent in the last year; the latter by only 1.6 per cent.
…
“It’s got to do with unemployment,” he said. “It’s consumer driven in part because unemployment continues to rise, which makes it hard to keep up with bills. But companies are better structured to handle the recession because they weren’t as debt-addled as consumers,” he said.

Source/Full Story: CBC
Technorati Tags: bankruptcy

… a growing number of new shoplifters are outwardly reputable, middle-class people who are walking off with French cheeses, quality meats, cosmetics, mobile phones, clothing and other goodies that they feel they need to maintain a quality of life they can no longer afford.

Source/Full Story: Recession Retail Theft: Middle-Class Shoplifters on Rise – TIME

A giant web of video-surveillance cameras has spread across Chicago, aiding police in the pursuit of criminals but raising fears that the City of Big Shoulders is becoming the City of Big Brother.

Source/Full Story: Chicago’s Camera Network Is Everywhere – WSJ.com

What economic challenges are still ahead? I thought the economy was recovering, and green shoots abound.

US unemployment surged above 10 per cent for the first time in more than a quarter of a century in October, increasing political pressure on the Obama administration.

According to figures revealed on Friday, the unemployment rate rose to 10.2 per cent, its highest since 1983, as companies continued to shed jobs in spite of a return to economic growth. Non-farm payrolls were down 190,0000, slightly more than analysts expected, taking the total of jobs lost since the recession began to 7.3m.

In a televised statement, President Barack Obama called the unemployment rate “a sobering number that underscores the economic challenge ahead”.

Source/Full Story: FT.com

Nearly half of all U.S. children and 90 percent of black youngsters will be on food stamps at some point during childhood, and fallout from the current recession could push those numbers even higher, researchers say.

The estimate comes from an analysis of 30 years of national data, and it bolsters other recent evidence on the pervasiveness of youngsters at economic risk. It suggests that almost everyone knows a family who has received food stamps, or will in the future, said lead author Mark Rank, a sociologist at Washington University in St. Louis.

“Your neighbor may be using some of these programs but it’s not the kind of thing people want to talk about,” Rank said.

The analysis was released Monday in the November issue of Archives of Pediatrics and Adolescent Medicine. The authors say it’s a medical issue pediatricians need to be aware of because children on food stamps are at risk for malnutrition and other ills linked with poverty.

“This is a real danger sign that we as a society need to do a lot more to protect children,” Rank said.
…

“The current recession is likely to generate for children in the United States the greatest level of material deprivation that we will see in our professional lifetimes,” Stanford pediatrician Dr. Paul Wise wrote.

Wise said the Archives study estimate is believable.

“I find it terribly sad, but not surprising,” Wise said

Source/Full Story: Half of US kids will get food stamps, study says
Technorati Tags: food stamps