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

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

Gold is at a new high this morning, @ 1,165.96

Visitors to America might have noticed the television ads urging us to buy gold. One such “spokesman”, formerly in charge of managing the government’s hoard of the yellow stuff, including the ingots buried at Fort Knox, points out that the value of gold has never fallen to zero. Why investors are expected to find such a modest claim reassuring I can’t imagine. But something is persuading people to buy gold, driving the price to and past $1,100 per ounce, from about $270 at the beginning of this decade, and around $700 when the financial crisis first hit.

This is not mere panic buying by a herd of small investors trying to benefit from what is called a momentum play. John Paulson (no relation to Hank), the investor who made $20 billion for his hedge fund between 2007 and 2009 by betting on a collapse of the financial and housing markets, is betting on gold in a big way. Paulson & Co already holds $3 billion in gold-related investments (including AngloGold Ashanti and Kinross Gold), and Paulson has just seeded a new gold-related fund with some $250m of his own funds. His modest objective: appreciation at a rate higher than the increase in the price of gold itself.

All of this means that investors do not believe that President Barack Obama will respond to the enormous pressure put on him during his visit to Beijing and take steps to strengthen the dollar. The president and Treasury secretary Timothy Geithner might talk the talk of a strong dollar but they walk the walk of a declining one. A weak dollar should lift exports and cut imports, which in White House terms means jobs for American workers. And it is jobs that the president asks his aides about first thing every morning. With reason.

Should the unemployment rate remain in double digits when elections roll round a year from now, Republicans would gain congressional seats by making the plausible claim that the Democrats’ deficit spending served only to create a debt burden that will weigh down the living standards of our children and grandchildren.

Source/Full Story: Times Online
Technorati Tags: Gold

…
So we can expect that job losses will continue until the end of 2010 at the earliest. In other words, if you are unemployed and looking for work and just waiting for the economy to turn the corner, you had better hunker down. All the economic numbers suggest this will take a while. The jobs just are not coming back.
The long-term picture for workers and families is even worse than current job loss numbers alone would suggest. Now as a way of sharing the pain, many firms are telling their workers to cut hours, take furloughs and accept lower wages. Specifically, that fall in hours worked is equivalent to another 3 million full time jobs lost on top of the 7.5 million jobs formally lost.

This is very bad news but we must face facts. Many of the lost jobs are gone forever, including construction jobs, finance jobs and manufacturing jobs. Recent studies suggest that a quarter of U.S. jobs are fully out-sourceable over time to other countries.

Other measures tell the same ugly story: The average length of unemployment is at an all time high; the ratio of job applicants to vacancies is 6 to 1; initial claims are down but continued claims are very high and now millions of unemployed are resorting to the exceptional extended unemployment benefits programs and are staying in them longer.

Based on my best judgment, it is most likely that the unemployment rate will peak close to 11% and will remain at a very high level for two years or more.

Source/Full Story: nydailynews.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

Full Story/Source: Reuters

U.S. job losses fell to their lowest level in a year last month, but the unemployment rate jumped to a 26-year high, painting a mixed picture of an economic recovery hindered by weakness in the labor market.

The Labor Department said on Friday the jobless rate climbed to 9.7 percent in August, the highest since June 1983. The bigger-than-expected rise suggested weak consumer spending would impede recovery from the worst slump in seven decades.

Employers cut 216,000 jobs, the smallest since August 2008, but the department revised upward the June and July job losses by 49,000.

“Things are much better than they were six months ago, but the patient is still somewhat sick and on the road to recovery,” said Jack Bauer, a senior economist at Manning & Napier in Rochester, New York. “The recession ended probably somewhere around June, but the recovery is going to be muted.”

The jobs report confirmed the pace of layoffs had eased from early this year. Nearly three-quarters of a million jobs were lost in January alone.

Technorati Tags: unemployment

U.S. home loans failed at a record pace in July despite ongoing federal and state programs to avoid foreclosures, which have severely strained housing and the economy.

Foreclosure activity jumped 7 percent in July from June and 32 percent from a year earlier as one in every 355 households with a loan got a foreclosure filing, RealtyTrac said on Thursday.

Filings — including notices of default, auction and bank repossession — have escalated with unemployment.

“July marks the third time in the last five months where we’ve seen a new record set for foreclosure activity,” James J. Saccacio, RealtyTrac’s chief executive, said in a statement.

“Despite continued efforts by the federal government and state governments to patch together a safety net for distressed homeowners, we’re seeing significant growth in both the initial notices of default and in the bank repossessions.”

More than 360,000 households with loans drew a foreclosure filing in July, a record dating back to January 2005, when RealtyTrac started tracking monthly activity.

Notices of default, auction or repossession have reached nearly 2.3 million in the first seven months of the year — with more than half a million bank repossessions, the Irvine, California-based company said.

Making timely payments keeps getting more harder for borrowers who have lost their jobs or seen their wages cut.

The unemployment rate is 9.4 percent and President Barack Obama has said he expects it will hit 10 percent.

Source/Full Story: Reuters

When those adjustments are taken into account for May 2009, the unemployment rate soars to 16.4%. That is the highest rate since the BLS began calculating the U-6 rate in 1994. While not exactly comparable, it is also higher than the BLS’s earlier and yet broader adjusted unemployment rate called the U-7. The BLS began calculating the U-7 rate in 1976 but discontinued it in 1994 in favor of the U-6 rate. In the 1982 recession the U-7 reached 15.3%, its highest level. In fact, no bout of unemployment since the last year of the Great Depression in 1941 would have produced an adjusted unemployment rate as high as today’s.

Why is the real unemployment rate so much higher than the official, or U-3, rate? First, forced part-time work has reached its highest level ever, going all the way back to 1956 and including the 1982 recession. In May 2009, 8.8 million workers were forced to work part time for economic reasons. Forced part-timers are concentrated in retail, food services, and construction; about a quarter of them are young workers between 16 and 24. The number of discouraged workers is high today as well. In May, the BLS counted 2.2 million “marginally attached” workers. That matches the highest number since 1994, when the agency introduced this measure.

With the economy in the throes of a catastrophic downturn, unemployment, no matter how it’s measured, will rise dramatically and impose yet more devastating costs on society and on those without a job or unable to find full-time work.

Source/Full Story: Dollars & Sense

Confidence in the world economy dropped for the first time in four months in July as government stimulus efforts showed little sign of reducing unemployment, a Bloomberg survey of users on six continents showed.

The Bloomberg Professional Global Confidence Index declined to 39.13 in July from 43.57 in June. A reading below 50 means pessimists outnumber optimists. A measure of U.S. participants’ confidence in the world’s largest economy fell to 29.5 from 36.7, the survey showed.

The MSCI World Index is down close to 2 percent since the U.S. Labor Department on July 2 reported higher-than-expected job losses and an unemployment rate approaching 10 percent. Treasury Secretary Timothy Geithner said yesterday the world will probably suffer “more than the usual” setbacks in exiting the worst slowdown since the Great Depression.

“No one can wave a magic wand,” said David Semmens, an economist at Standard Chartered Bank in New York and a regular survey participant. “We aren’t pulling out of the recession in the same way as in past recessions. The economic outlook isn’t improving as strongly as people would have hoped.”

The survey of more than 2,700 Bloomberg users was conducted between July 6 and July 10. Since the previous survey, the International Monetary Fund and the World Bank lowered their forecasts for global growth this year, while leaders from advanced nations say the recovery is too fragile to consider reversing more than $2 trillion in stimulus efforts.

Source/Full Story: Bloomberg.com

Just as the nation’s housing market has begun showing signs of stabilizing, another wave of foreclosures is poised to strike, possibly as early as this summer, inflicting new punishment on families, communities and the still-troubled national economy.

Amid rising unemployment and falling home prices, mortgage defaults have surged to record levels this year. Until recently, many banks have put off launching foreclosure action on the troubled properties, in part because they had signed up for the Obama administration’s home-stability plan, which required them to consider the alternative of modifying loans to make it easier for borrowers to make payments.

Just how big the foreclosure wave will be is unclear. But loan defaults are up sharply. And with many government and banks’ self-imposed foreclosure moratoriums expiring, the biggest lenders indicate that they are likely to move more aggressively to clear up a backlog of troubled mortgages.
Nationally, home sales have been steadying, thanks largely to an abundance of cheap foreclosed properties, government incentives and record low mortgage rates. Housing construction starts have flattened out, helping to bring supply into balance with demand. The rate of housing price declines has slowed as well, even turning up in some communities.

But rising foreclosures will depress home values, pushing more homeowners underwater. Mark Zandi of Moody’s Economy.com estimates that 15.4 million homeowners — or about 1 in 5 of those with first mortgages — owe more on their homes than they are worth.

Also, consumer confidence is already exceedingly low, and another jolt to the housing market could further crimp spending, which has been pummeled by the deep recession and persistent weakness in the job market. The latest unemployment rate, for June, rose to 9.5%, and many analysts predict that it will keep rising until the middle of next year.

Source/Full Story: Los Angeles Times

Vice President Joe Biden said the Obama administration “misread how bad the economy was” but stands by its stimulus package and believes the plan will create more jobs as the pace of its spending picks up.

Biden, in an interview airing Sunday on ABC’s “This Week,” said the nation’s 9.5 percent unemployment rate is “much too high.”

“The figures we worked off of in January were the consensus figures and most of the blue chip indexes out there,” Biden said.

“We misread how bad the economy was, but we are now only about 120 days into the recovery package,” Biden added. More jobs will be created in coming months, he said.

Biden noted that the $787 billion economic stimulus package was set up to spend the money over 18 months. Major programs will take effect in September, including $7.5 billion for broadband Internet service, plus new money for high-speed rail and the nation’s electrical grid, he said.

Biden said it’s premature to say whether the country will need a second stimulus package.

On other issues:

• Biden, asked whether the United States would put the lives of U.S. troops on the line should violence flare up again in Iraq, said “no.” The U.S. still plans to withdraw all troops by 2011, Biden said. “That is the intention,” he said. “We believe the Iraqis will be fully capable of maintaining their own security.”

• Biden said if the Iranian government seeks to engage in a dialogue with the United States, the U.S. will engage. “If the Iranians respond to the offer of engagement, we will engage,” Biden said. “The offer’s on the table.”

• Biden said Israel has the right to pursue a different course of action on Iran than the U.S. does. “Look, Israel can determine for itself — it’s a sovereign nation — what’s in their interest and what they decide to do relative to Iran and anyone else.”

• On North Korea’s Saturday launch of more missiles, he said “the question is, is there anything that we should do about it?”

“Look, this has almost become predictable behavior,” Biden said. “Some of it seems like almost attention-seeking behavior.” The U.S. shouldn’t give North Korea the attention, he said, adding that the U.S. policy has been correct so far.

“We have succeeded in uniting the most important and critical countries to North Korea on a common path of further isolating North Korea,” Biden said.

• The Obama administration is “well on the way” to resolving a dispute between CIA Director Leon Panetta and National Intelligence Director Dennis Blair, Biden said. The conflict centers on Blair’s effort to choose his own representatives at U.S. embassies instead of relying only on CIA station chiefs. “They both won,” Biden said. He declined to give details, saying the resolution was not yet complete.

• Biden said he respected Alaska Gov. Sarah Palin’s decision to step down. “It maybe had a lot to do with what the state of their life was, and the state of their family, et cetera,” Biden said. “So I’m not going to second-guess her.”

Source/Full Story: dgshi.cn

European stocks dropped for a third straight week, the longest stretch of losses since March, as concern mounted that the economy won’t recover soon.

Volkswagen AG slumped 6.3 percent, leading declines in automakers, after U.S. car sales fell in June and Credit Suisse Group AG cut its assessment of the industry. ThyssenKrupp AG, Germany’s largest steelmaker, and Finland’s Outokumpu Oyj dropped more than 3 percent as an industry group said European steel consumption will fall in 2009.

The Dow Jones Stoxx 600 Index fell 0.2 percent this week to 204.08 after reports showed unemployment in Europe and the U.S. rose. The measure has fallen 4.8 percent since June 12 on speculation share prices have outpaced the outlook for economic growth after a three-month rally pushed valuations to 25.4 times earnings, near the highest level since 2004. The benchmark index for European equities still rose 17 percent in the second quarter, the biggest gain since 1999.

“Macroeconomic data are still disappointing and show economic recovery is not yet a reality,” said Emmanuel Soupre, who helps manage about $18 billion at Neuflize OBC in Paris. “We are going to keep fluctuating between optimism and pessimism in the months to come.”

Unemployment in the 16-member euro region increased to 9.5 percent in May from a revised 9.3 percent in April, the European Union statistics office in Luxembourg said this week. The U.S. unemployment rate rose to 9.5 percent in June, the highest since August 1983.

Source/Full Story: Bloomberg.com

Stock markets on both sides of the Atlantic tumbled on Thursday as investors took fright at a bigger-than-expected fall in US jobs last month that dashed hopes the recession was all but over in the world’s biggest economy.

The data showed that the number of people in employment fell 467,000 in June and the unemployment rate rose from 9.4 per cent to 9.5 per cent, its highest for 26 years.

Barack Obama, the president, called the jobs data “sobering”, but expressed confidence that the US would see recovery in the short term.

The official figures sent shares in the US and Europe and commodity prices sharply lower, with investors increasingly doubtful that so-called economic “green shoots” heralded a swift recovery from the worst recession in decades.

In New York, the S&P 500 index was trading 2.9 per cent lower at the close, while the FTSE Eurofirst 300 fell 2.6 per cent and FTSE 100 closed down 2.5 per cent. The yield on short-term US government debt fell, suggesting the market believed the prospect of an early rise in interest rates had diminished.

Source/Full Story: FT.com

California’s unemployment rate climbed to 11.5 percent in May, the highest in modern record-keeping, the California Employment Development Department reported today. Sacramento County unemployment was at 11.1 percent in May, up from April’s 10.8 percent.

Nonfarm payrolls numbers statewide dropped by another 68,900 for the month. That’s roughly the same rate of job losses as in March and April, suggesting that California hasn’t yet turned the corner to economic recovery.

“We were hoping that these numbers would be dropping,” said Howard Roth, chief economist at the state Department of Finance.

The rate at which jobs are being lost nationally dropped in May, making California’s continued losses particularly disappointing, Roth said.

Source/Full Story: sacbee.com

Unemployment has soared to its highest level in more than 12 years as UK companies continue to fold or slash headcount in the face of Britain’s deepest recession in almost 30 years.

The total number of people out of work rose by 232,000 in the three months to April, to 2.261 million, data from the Office for National Statistics showed. This pushed the unemployment rate, as measured by the labour force survey, to 7.2% – the highest since July 1997.

The ONS said another 39,300 people joined the claimant count in May, taking the number of people claiming jobseeker’s allowance to 1.554 million. This was less than forecast by City economists, who had expected a rise of 60,000.

Today’s data also showed that the number of people in employment fell by 271,000 between February and April – the biggest three-month fall on record. Shadow work and pensions secretary Theresa May said this was “another grim milestone” in the recession.

“The sad reality is that the Government is continuing to sleepwalk through this unemployment crisis,” claimed May.

Source/Full Story: guardian.co.uk