Job, Job cuts, Job creators

[Cobra]

My personal view .... hope i did not misunderstood the writer but my point is dont just look on surface of any report .

Defined by wikipedia ..... " Unemployment is the state in which a worker wants, but is unable, to work. The unemployment rate is the number of unemployed workers divided by the total civilian labor force. The unemployment rate is also used in economic studies and economic indexes such as the Conference Board's Index of Leading Indicators (US only)."

With that in mind, Point (1) is irrelevant. And correctly so if the person do not need a job or not in search for one because its not important to him/her then it has no economic impact to the country. Note why we use unemployment rate ? .... as an economic indices.

(2) The writer must be updated and recognise that time have changed and with technology etc, the terms and state of employment will change ... we must accept that part-timing, contract employment and home-based employment will be part of our lives and a norm in the future. Hence he should not refer them as "stealh unemployment".  In any case, for economic indices purposes, you are either employed or not, whatever the terms are irrelevant.

Point (3) is even more ignorant. Similarly, with technology and changing times, working hours should not be used to calculate employment rate. I personally have short working hours but my productivity with respect to my business/sales objectives exceeds expectation. Hence, longer working hours does not mean Productivity (Productivity is an economic index).

Even if the unemployment rate is 20%, you still got to look into the demographics that make up the 20% to understand if it impacts the country's economy. For example, if majority are low skill workers, the impact to the country whose economy is driven by high value manufacturing may be minimum.

You may also have the case of a rich country where employment rate is high but only because the citizens are rich and do not need to be employed. So the rate is irrelevant to its economy,

[zuoom]

cobra, i have nothing on the 1st two point.

however, for the 3rd point. working hour is still a relevance. especially for those working on the low to mid range personnell. the less amount of hours they are at work, the less dough they collect.

unlike mid to higher range personnel where total of working hours is not a gauge of how effective/efficient that person is.
as long as the job is done, even if that guy is allocated 40 hours.. and he did it in 20 hours... the job is done.  then one can say it's 100% or perhaps even 200% effective.

btw, is there a productivity index?

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JULY 14, 2009, 2:43 P.M. ET

Obama Says Jobless Rate Likely to Tick Up for Several Months

By HENRY J. PULIZZI

WASHINGTON -- President Barack Obama warned Tuesday that the U.S. jobless rate, already at its highest level in more than a quarter century, is likely to worsen for several months.

"My expectation is that we will probably continue to see unemployment tick up for several months," Mr. Obama told reporters after a meeting with Dutch Prime Minister Jan Peter Balkenende.

Unemployment stood at 9.5% nationwide last month, a rate that has prompted calls for additional stimulus measures, as well as criticism that the earlier $787 billion package has so far failed to create jobs. Mr. Obama, who has said he believes joblessness will soon hit 10%, will visit Michigan later Tuesday, a state already dealing with double-digit unemployment.

While he said he doesn't have a "crystal ball," Mr. Obama said he anticipates unemployment will follow historical trends and lag "for some time" even after an economic recovery begins.

On the positive side, he said the U.S. has "seen some stabilization in the financial markets, and that's good because that means companies can borrow and banks are starting to lend again."

"The challenge for this administration is to make sure that even as we are stabilizing the financial system, we understand that the most important thing in the economy is people able to find good jobs that pay good wages," Mr. Obama said.

The president met with Mr. Balkenende, a close ally and partner in Afghanistan, shortly before leaving Washington for Warren, Mich., where he plans to unveil a big proposed government investment in the community-college system.

Messrs. Obama and Balkenende said they discussed a host of issues, including Afghanistan, climate change and the Guantanamo Bay detention facility. Mr. Obama invited Mr. Balkenende to attend September's Group of 20 summit in Pittsburgh. The Netherlands isn't a member of the G20, but Mr. Obama said the group could benefit from Mr. Balkenende's experience and expertise working with world leaders.

"Overall, we think this partnership is strong and will continue to grow," Mr. Obama said.

Tuesday evening, Mr. Obama will throw out the first pitch at the Major League All-Star Game in St. Louis. Asked if he's been practicing, he acknowledged that he wanted to loosen his arm up a little bit.

Mr. Obama hasn't visited the mound at a professional ballpark since last year's American League Championship Series.

"I just wanted to keep it high," Mr. Obama said of his strategy last year. "There was no clock on it, I don't know how fast it went, but if it exceeded 30 miles per hour I'd be surprised. But it did clear the plate."

Write to Henry J. Pulizzi at henry.pulizzi@dowjones.com

via : http://www.singsupplies.com/showthread.php?t=32835

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US businesses are cutting workers' hours and jobs at a pace that far outstrips the rate of the economy's contraction, generating a productivity boom that in ordinary times would be a welcome sign of healthy growth.

It is a bit of mystery why companies are downsizing so drastically, but the consequences are clear.

For Corporate America, it means a strong—although possibly fleeting—rebound in profits. For employees, it means a dismal job market is getting worse and may not recover any time soon.

"I don't think anyone fully understands this phenomenon," Lawrence Summers, the head of President Barack Obama's National Economic Council, said in a speech Friday.

"One potential explanation is greater financial pressure on firms in this recession has led them to do anything they can to shed cash flow commitments by laying off workers at a more rapid pace or leaving jobs vacant when people leave," he said.

Other theories posit that companies bracing for an even longer economic downturn, or perhaps the economy was even weaker than official government data showed.

Regardless of the reason, high unemployment is a political nightmare for Obama and his economic team. Summers said the jobless rate in this recession is running about 1 to 1.5 percentage points above what would normally be attributable to a slump of this magnitude.

Slideshow: the Best Jobs In America
The unemployment rate hit a 26-year high of 9.5 percent in June, far higher than the Obama administration envisioned when it pushed for a nearly $800 billion stimulus package early this year.

Critics on both sides of the political aisle have pointed to the persistently weak job market as evidence that either the stimulus was poorly designed or simply too small.

Widening Gap

Productivity typically declines during recessions. Hiring workers is expensive, so companies tend to hoard labor and wait out the slump, which means costs stay high while output falls.

The fact that companies are managing to produce more with less labor is good news for profits and helps explain why many companies have reported better-than-expected second-quarter results in recent days.

Slideshow: The Worst Jobs In America
http://www.cnbc.com/id/28539061/

But it could come back to haunt them if the weak labor market triggers another spike in home foreclosures and credit card defaults, piling more losses on banks just when the financial sector is starting to heal.

Total hours worked fell at about an 8 percent annual rate in the second quarter, Labor Department data shows.


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US Recession Easing But Likely Not Over: NABE
http://www.cnbc.com/id/32000708

Goldman Sachs economist Andrew Tilton thinks second-quarter gross domestic product fell at a more modest 1 percent rate. "That's a 7-point gap, and there have only been a few instances in the last 50 years when it has been that wide," he said. "It's particularly unusual at a time when the economy is not growing." Indeed, the gap appears to have widened last quarter.

In the first quarter, when GDP fell at a 5.5 percent annual rate, the number of hours worked fell at a 9 percent pace.

Unless second-quarter GDP is far worse than economists expect, productivity will be positive for five out of the six quarters since the recession began in December 2007.

To be sure, economic data is subject to revision, and the Commerce Department is scheduled to release a slew of revised GDP data at the end of this month, which may show the productivity boom was not nearly as great as it first seemed.


Tilton said some of the productivity gain may indeed be revised away, but the gap between labor and output was too wide to be completely erased by the new numbers.

Staying Power

If the Federal Reserve is correct in the economic predictions it released last week, the current productivity boom will last at least through 2010.

So will the labor market pain. The central bank estimated that economic growth will resume in 2010.

But unemployment will come down only slightly from a 2009 peak of around 10 percent and it could be five or six years before the economy resumes normal growth and employment.

The White House's Summers said the unusual rise in productivity and unemployment justified the administration's approach to fixing the economy.

"If unemployment, and the surprise part of the increase in unemployment, reflects more than just weak aggregate demand, the case for measures to increase the flow of credit and get banks lending again—as the administration has pursued—is reinforced," he said Friday.

However, the damage may be done. Brian Bethune, an economist with IHS Global Insight, said the longer people are out of work, the harder it is for them to find new jobs.

Slideshow: Hot Jobs for a Cold Economy
http://www.cnbc.com/id/28194782/

The average length of unemployment is nearing six months, the longest since the Labor Department began tracking that in 1948, and there is little sign of improvement.

"No matter how much money the federal government wants to pour into training, most training and learning occurs on the job," Bethune said. "When people aren't working, their skill sets are decaying."

via : http://www.cnbc.com/id/32009883

[Cobra]

cobra, i have nothing on the 1st two point.

however, for the 3rd point. working hour is still a relevance. especially for those working on the low to mid range personnell. the less amount of hours they are at work, the less dough they collect.

unlike mid to higher range personnel where total of working hours is not a gauge of how effective/efficient that person is.
as long as the job is done, even if that guy is allocated 40 hours.. and he did it in 20 hours... the job is done.  then one can say it's 100% or perhaps even 200% effective.

btw, is there a productivity index?

(1) The argment here is using working hours to calculate unemployment rate ... not productivity. And exactly in your description above I dont agree one should generalise short working hours to mean higher unemployment rate, as the writer was trying to re-compute.

(2) Productivity Index? In economics context ? Yes, but specific to the area or industry you referring to. Productivity obviously have a direct relationship to the economy. You can read them in any good economics text book or wiki ...

http://en.wikipedia.org/wiki/Productivity#Economic_growth_and_productivity

As you know, our gross domestic product (GDP) is one the primary indicators of the health of the country's economy. It represents the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of the economy. So logically, if Singaporeans has higher productivity, we produce more over a same time period ... meaning growth in our economy.

(3) Again, unemployment rate alone mean nothing unless you look at the breakdown and details to understand where the dangers are. There are many many factors, demographics, profile, 10% in 2009 is not the same as 10% in 1950, etc etc ....

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Productivity Rises 6.4%, Best Gain in Six Years
Published: Tuesday, 11 Aug 2009 | 9:24 AM ET
By: Reuters

U.S. non-farm productivity in the second quarter rose at its fastest pace in six years as companies slashed costs to protect profits, government data showed Tuesday.

The Labor Department said non-farm productivity rose at a 6.4 percent annual rate, the biggest gain since the third quarter of 2003, from a revised 0.3 percent gain in the first quarter. Productivity for the January-March quarter was previously reported as a 1.6 percent gain.

Analysts polled by Reuters had forecast productivity, which measures the hourly output per worker, rising at a 5.3 percent rate in the second quarter.

"It's good because it helps keep inflation low; labor costs are pretty benign," said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Fla.

    * Business Confidence Down
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    * Krugman: More Stimulus Needed

"On the other hand it means you can do more with fewer people," he said.

U.S. Treasury debt prices held gains on the data, while stock index futures were little moved.

Hours worked plunged at a 7.6 percent rate in the second quarter, the Labor Department said.

Unit labor costs, a gauge of inflation and profit pressures closely watched by the Federal Reserve, fell 5.8 percent, the biggest decline since the second quarter of 2000. Analysts had expected unit labor costs to fall 2.4 percent in the second quarter. Unit labor costs dropped by a revised 2.7 percent in the January-March quarter.

The government also published revisions to productivity for 2006 through 2008 following adjustments to gross domestic product estimates.

Compensation per hour rose at a 0.2 percent pace and, adjusted for inflation, was down 1.1 percent, while output fell at a 1.7 percent rate in the second quarter.

Compared with the April-June quarter of 2008, non-farm productivity was up 1.8 percent. Unit labor costs fell 0.6 percent year-on-year. Compensation from a year earlier rose 1.3 percent and was up 2.2 percent once adjusted for inflation.

Output, measured on a year-on-year basis, was down 5.6 percent.

via : http://www.cnbc.com/id/32370229

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old news. Seagate drops 2000 workers.

http://layofftracker.blogspot.com/2009/08/seagate-layoffs-2000-workers-in.html

Wednesday, August 5, 2009
Seagate layoffs 2,000 workers in Singapore

Computer hard disk maker Seagate Technology said it will lay off 2,000 workers in Singapore, or more than 4 percent of its global workforce, as it closes manufacturing facilities in the city-state in a bid to cut costs by $40 million a year.

The move, which Seagate said would result in restructuring charges of $80 million, follows a slide in electronics exports from Singapore this year due to weaker consumer demand in the economic downturn.

"We are moving our hard disk operation at Ang Mo Kio (in Singapore) to other Seagate sites in other countries," company spokeswoman Lotus Tan told Reuters but did not provide further details.

She said Seagate employed a total of 8,000 workers in Singapore and would keep Seagate's Asia headquarters, media operation as well as a product development and design center there. According to Seagate's website it has about 45,000 employees around the world.

Seagate said the Ang Mo Kio hard drive factory would be closed by the end of 2010 but would not meaningfully change its production capacity as it will move manufacturing to other locations, which include Thailand, China and Malaysia.

Seagate said in a filing with U.S. regulators that total restructuring charges of approximately $80 million would include about $60 million for severance payments and about $10 million for the relocation of manufacturing equipment.

It plans to record the severance charges of up to $60 million in the current quarter, with the remainder of the charges to be incurred throughout the calendar year of 2010. Seagate's fiscal year 2009 ended on July 3.

The company expects the move to generate annual savings of $40 million when the closure is completed.

Singapore's overall unemployment rate stood at 3.3 percent in the second quarter but the number of people employed in Singapore fell by 12,400 in April-June, twice as much as in the first quarter.

Tuesday's announcement came after Seagate already said in May it had initiated a restructuring plan that included a reduction of about 1,100 employees or 2.5 percent of the company's global workforce.

Source: Reuters

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in the foot steps of the electronic sector (couple of months back when hordes of employees were recall back for work.), the automotive sector does likewise.

question : for how long? sustained? 

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXawABaLIf9M

GM Recalls 1,350 Workers as It Adds Shifts, Overtime (Update1)
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By Katie Merx

Aug. 18 (Bloomberg) -- General Motors Co. called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosts second-half production, partly in response to demand from the government’s “cash for clunkers” program.

GM will add shifts at the CAMI plant in Ontario, Canada, where the redesigned Chevrolet Equinox and all-new GMC Terrain are built, and Lordstown, Ohio, where it assembles the compact Chevrolet Cobalt, adding back United Auto Workers and Canadian Auto Workers union jobs as sales top expectations. The Ontario plant will be running at full capacity.

“The recession is over,” said Erich Merkle, president of consulting firm Autoconomy in Grand Rapids, Michigan. “I think we’re going to get a bit of a drop-off as cash-for-clunkers runs its course, but I believe it will hand off to an economy that’s much stronger.”

In all, the production changes add about 60,000 units to GM’s fourth-quarter plans, Mark LaNeve, the vice president overseeing U.S. sales, said on a conference call. The company said it will make 642,000 vehicles in the fourth quarter, about 20 percent more than in the third quarter. The automaker expects July and August sales to top a previous internal forecast by 60,000 to 70,000 vehicles, he said.

GM has added Friday shifts in Lordstown and in Orion Township, Michigan, where it assembles the Chevrolet Malibu, Chris Lee, a GM spokesman, said yesterday. Those plants had been running four 10-hour days each week.

Adding Production

“We are adding production to almost all of our operations in the United States,” Tim Lee, GM group vice president overseeing global manufacturing and labor, said during the call.

GM will delay the idling of its Orion Township plant until the U.S. Thanksgiving holiday, he said. The company had planned to stop production there at the end of September until 2011 when it would start making a so-called B-car, similar in size to a Chevrolet Aveo.

GM sales of cars and light trucks in the U.S. fell 19 percent in July, less than the 24 percent drop analysts expected.

LaNeve expects August to be the best sales month so far this year, he said on the call, with “dealers clamoring for more vehicles in almost every segment.” The Chevrolet Equinox and Camaro were among those in the highest demand, he said. Dealers are also ordering pickup trucks faster than GM is producing them, LaNeve said, so the automaker will increase production of those as well.

More to Come

There may be more production increases to come in the fourth quarter and the first quarter of 2010, LaNeve said.

GM is considering adding a third shift early next year to a plant in Kansas City, Kansas, where it assembles the Malibu and Saturn Aura and the new Buick LaCrosse, said two people with knowledge of the situation who asked not to be named because the plans are not public.

Chief Executive Officer Fritz Henderson, 50, is working to maintain GM’s No. 1 spot in the U.S. auto market while returning it to profitability after emerging from bankruptcy on July 10. The company will “definitely” add to production plans, he said Aug. 13, without sharing details.

Ford Motor Co. is boosting production by 26 percent in the second half, the Dearborn, Michigan-based automaker said Aug. 13. Chrysler Group LLC, based in Auburn Hills, Michigan, is also planning to make more light trucks, said a person familiar with the situation.

‘Clunkers’ Waning

The U.S. government started the $1 billion program commonly known as “cash for clunkers” in July to encourage people to turn in old, less fuel-efficient vehicles for new vehicles that use less gas. Formally known as the Car Allowance Rebate System, it was expanded by $2 billion this month.

Auto sales nationwide reached an annual pace of 11.2 million after six months of less than a 10 million-unit rate. Over the past decade, annual sales have averaged more than 16 million.

Since the late July peak, vehicle deliveries fell 15 percent last week, Edmunds Inc.’s Edmunds.com reported on its Web site, citing its study.

Expression of an intention to buy a new car is off 31 percent from the peak, Edmunds.com said. Purchase intent is a leading indicator of sales within 90 days, Edmunds.com said.

With GM inventory at about 360,000 vehicles today, its lowest level since GM has tracked the figure, the automaker believes it needs to add production even if sales drop off somewhat when the clunker program ends, LaNeve said on the call.

“We’re counting on some of the lift we’re seeing from that program falling off,” LaNeve said. “Even given that, we definitely need to have this production, if not more.”

To contact the reporter on this story: Katie Merx in Southfield, Michigan, at kmerx@bloomberg.net
Last Updated: August 18, 2009 18:32 EDT

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On Friday September 4, 2009, 8:40 am EDT

WASHINGTON (Reuters) - U.S. employers cut a fewer-than-expected 216,000 jobs in August, while the unemployment rate rose to a 26-year high, the government said on Friday in a report showing a still fragile labor market.

The Labor Department said the unemployment rate rose to 9.7 percent after dipping to 9.4 percent in July and the decline in payrolls was the smallest in a year. The department revised job losses for June and July to show 49,000 more jobs lost than previously reported.

Analysts had expected non-farm payrolls to drop 225,000 in August and the unemployment rate to rise to 9.5 percent.

The labor force increased by 73,000 in August, indicating the return of some jobless workers who had given up looking for work accounting for part of the rise in the unemployment rate.

Since the start of the recession in December 2007, the economy has shed 6.9 million jobs, the department said. Stubbornly high unemployment is wearing on consumer confidence and crimping domestic demand, pointing to an anemic recovery from the worst slump in 70 years. Consumer spending accounts for over two-thirds of U.S. economic activity.

However, the August report confirmed the pace of layoffs was easing from early this year, when nearly three quarters of a million jobs were lost in January.

Manufacturing employment fell by 63,000, with a total of 2 million factory jobs lost since the start of the recession. Payrolls in construction industries dropped 65,000 after falling 73,000 in July.

The service-providing sector purged 80,000 workers in August, while the goods-producing industries shed 136,000 positions.

Education and health services continued to add jobs, with payrolls increasing 52,000 in August after rising 21,000 in July. Government employment fell 18,000 after slipping 28,000 in July.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

via : http://finance.yahoo.com/news/Unemployment-rate-rises-to-rb-1733516447.html?x=0

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Magna says to cut 10,500 jobs at Opel
AFP - Tuesday, September 15FRANKFURT (AFP) - - The co-head of Canadian auto parts maker Magna said Monday that it planned to cut 10,500 posts at loss-making German car maker Opel once it completes its takeover of the General Motors' unit.

Co-chief executive Siegfried Wolf said his group, which agreed last week to buy a majority stake in Opel from General Motors, was sticking with plans to cut jobs at Opel and its sister brand Vauxhall in Britain.

He confirmed figures reported over the weekend in the German media but said Magna had not modified its terms since late May, when it first signed a memorandum of understanding with GM on the deal.

"Our plans haven't changed since May 31," Wolf told reporters at a press briefing in Frankfurt ahead of the international auto show.

Previously, the figure reported was 10,000 job cuts.

The Opel business, including Vauxhall, employs some 50,000 workers across Europe.

Wolf did not say where the job cuts would be made.

German Economy Minister Karl-Theodor zu Guttenberg told the Sunday newspaper Bild am Sonntag that he believed the cuts were deeper than those estimated earlier by Magna.

GM said last week that it would sell a 55-percent stake in Opel to a consortium comprised of Magna and the state-owned Russian lender Sberbank. GM will retain 35 percent of Opel and employees the rest.

Financial details of the deal were not disclosed and GM noted that key details still had to be agreed upon.

- Dow Jones Newswires contributed to this story -

via : http://singsupplies.com/showthread.php?t=38125

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Times are tough for the 15.1 million people looking for work. Many are likely to see their benefits end before they find another job. And yet there are lots of $60,000-a-year jobs that employers can't fill. What gives? Unfortunately people who got thrown out of jobs like assembling cars and trucks can't get new ones because they often don't have the right skills.


It is not exactly clear how many of those $60,000 jobs are out there. According to the latest Job Openings and Labor Turnover Summary from the Bureau of Labor Statistics, there were 2.4 million open jobs in July. Of those, 422,000 were in professional and business services and another 534,000 were in the education and health services categories. My guess is that most of those jobs pay at least $60,000 representing about 40 percent of the unfilled positions.

What kinds of unfilled jobs pay $60,000? There's a long list: nurses, pharmacists, MRI technicians, energy researchers, accountants, health care workers, software sales representatives, actuaries, data analysts, physical therapists, electrical engineers, plant scientists and geotechnical engineers.

With the ratio of unemployed to open jobs topping 6:1 (as I wrote back in July, when there were 14.5 million unemployed and 2.4 million open jobs), the need for work is great. But then you have the problem of an unemployed quality control (QC) engineer for auto supplier Dura Automotive Systems Inc. in Mancelona, MI who told the AP he made about $75,000. When he applies for QC jobs in windmill blade or solar panel factories, he never hears back.

There is no easy answer. It's obvious that the people who lose their jobs ought to get training for the ones that go begging, but when you have no job, eating and paying the rent come first. Where will such unemployed workers find the extra money to get the training they need to take those open positions?

And then there's the problem of figuring out what kind of work they really like doing and have a talent to perform. For instance, while a person who turned a wrench on an auto assembly line might enjoy the pay that comes from nursing, it is unclear how many of those workers would have a knack for nursing.

With companies taking their time to hire just the right person, the odds that an employer will take a chance on a person who did well in a different industry are pretty low. Right now, it looks like there's no private sector solution.

The U.S. may need to step in to provide funding for the kind of retraining that's needed to fill those empty jobs. But with 15.1 million out of work, even that would not be enough.

via : http://www.dailyfinance.com/2009/10/05/with-15-million-unemployed-thousands-of-middle-class-jobs-go-un/

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http://money.cnn.com/2009/10/06/markets/thebuzz/index.htm

Take this jobless recovery and shove it!
Economists argue that job growth always lags following a recession. But this time may be different. It's hard to have a recovery with unemployment near 10%.

By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: October 6, 2009: 12:30 PM ET





NEW YORK (CNNMoney.com) -- Australia's raising interest rates! The global recession is over! The only question now is how strong and fast the economic rebound will be. Hip hip hooray!

Not so fast. I hate to ruin the celebration. But before you throw another shrimp on the barbie, consider this. All the talk about whether or not the economy is currently in the midst of a U-shaped, V-shaped, W-shaped, L-shaped or J-shaped recovery misses the point.

Sure, the recession may technically be over and stocks are rallying once more on hopes that the economy may finally be growing again. But as long as people continue to worry about their jobs -- and with good reason -- it's unlikely that any rebound will feel like a recovery to the people that matter most: consumers.

Most major U.S. companies are not expected to report much in the way of revenue growth during the third quarter. And the fourth quarter may not be anything to write home about either.

The National Retail Federation announced Tuesday that it expects sales during the holiday shopping season to be down 1% from last year. In its forecast, the NRF cited concerns about job losses and anemic wage growth as primary reasons why consumers are likely to spend less.

Simply put, the notion that unemployment can be dismissed as a lagging indicator and that the economy can enjoy healthy growth in a so-called jobless recovery may be a myth.

"You can't really call an end to the recession until we have a better situation in the labor market. We are not going to have a strong, sharp recovery unless there are gains in the job market," said Oscar Gonzalez, an economist with John Hancock Financial Services in Boston.

A Different kind of downturn

This recession has been considerably worse for average workers than the one in 2001. More than 7.2 million jobs have been lost in the past 21 months. That is staggering.

By way of comparison, 2.7 million jobs were lost during the 30 months stretching from March 2001 (the beginning of the previous recession) and August 2003 (the last month of job losses prior to the early stages of the credit crisis in the summer of 2007)

Unemployment hit 9.8% in September, and even the most bullish economists would admit that the jobless rate hasn't peaked yet. During the last economic slowdown, the unemployment rate peaked at 6.3% in June 2003.

And these are just the main headline numbers -- which don't tell the true story of how bad the job market is.

The Labor Department also reports a so-called underemployment rate, a figure that counts people who are working part-time because they can't get a full-time job, as well as discouraged workers who've given up trying to find a job.

Last month, the underemployment rate hit 17%. During the previous downturn, it went no higher than 10.4%.
0:00 /3:47Jobs won't return until 2010

It's also worth pointing out that the 2001 recession was largely brought about by a plunge in business spending after the tech bubble burst. That downturn didn't hit consumers as hard as this one, and was also widely confined to the coasts. If you weren't working on Wall Street or Silicon Valley, it was a fairly mild recession.

"The 2001 recession was sort of an oddball recession. The stock market bubble popped but housing did well after that so you didn't have as many jobs lost," said Ray Stone, an economist with Stone & McCarthy Research Associates in Princeton, N.J.

But the current recession has had a profound impact on all Americans. And it hit people where it really hurts. It's one thing when the value of your stock portfolio is decimated. It's another when the value of your home plummets and you risk foreclosure because you can't keep up with your monthly mortgage payments.
Some encouraging signs

Gonzalez said that although it does appear as if the housing market is finally starting to show some signs of life, he worries about whether recent gains in prices and sales will be sustainable if more and more people find themselves out of work.

"You could have more homes coming market. Foreclosures and consumer bankruptcies may go up if the job market does not improve. We have a weak vulnerable consumer." he said.

That said, it is probably an overstatement to suggest that the economy is going to get substantially worse. The stock market may often be irrational, but it usually does rally ahead of recoveries.

And outside of the job market, there have been legitimately encouraging economic signs. It appears that the services and manufacturing sectors are finally showing some signs of life, for example.

"I think the recovery did begin in the late summer. There's no reason to assume at the moment that we are double dipping into another recession just because of the September labor report," said Chris Probyn, chief economist with State Street Global Advisors in Boston.

Still, Probyn conceded that anyone who thinks the recovery will be strong and sharp needs to pay more attention to the labor market.

"I don't see a lot of pent up demand for cars and houses. The rebound in consumer spending may be sufficiently weak and corporations could remain cautious so they won't put people back to work," he said. "That may lead to a vicious circle where people's incomes don't increase and you'll have a far more drawn out recovery."

[zuoom]

http://news.bbc.co.uk/2/hi/business/8343517.stm

GM plans to cut 10,000 Opel jobs

Peter Mandelson: "There will be a future for the Vauxhall plants in the UK"

General Motors (GM) has confirmed that it plans to cut 10,000 jobs across its European car unit Opel, which includes the Vauxhall brand in the UK.

The announcement comes a day after GM said it was cancelling its deal to sell Opel to Canadian car parts firm Magna.

Unions in Germany said workers would begin walk-outs from Thursday in protest at GM's decision.

The German government, which had backed the sale of Opel, demanded GM repayment of a 1.5bn euro ($2.2bn; £1.3bn) loan.

Union anger

The 10,000 job cuts which GM now plans is broadly similar to the amount Magna proposed, though the company has yet to reveal where the axe will fall.

German trade unions now fear two of the four Opel factories in the country could close under the GM plan, whereas under the Magna agreement they had been given a guarantee that all four factories would have been kept going.

Map of GM Europe's key operations


Politicians and unions in Germany had favoured a sale to Magna as the best way to save German jobs, as it included a guarantee that no German factory would be closed.

Meanwhile Unite, the main union at Vauxhall, which employs 5,500 people in the UK, said its task was to minimise the number of jobs lost, and to ensure they are voluntary.

Tony Woodley, Unite's general secretary, said it was "inevitable" there would be some job losses at Vauxhall.

He added that it was right that GM should hold onto the two Vauxhall plants in Luton and Ellesmere Port "because this country is one of its strongest and most loyal customers".

Mr Woodley said it was now "absolutely certain" that GM will need repayable loans "from four or five" European Union nations.

Opel employs a total of 54,000 workers across Europe, with 25,000 based in Germany.

UK relief

GM's announcement was made by its vice-president John Smith, who did not indicate where the 10,000 cuts were likely to fall.

However, he said GM hoped to be able to present the details to European governments "very soon", with agreement in place with governments and unions between January and March of next year.

   
The German government had a very strong appetite for the Magna proposal, so I can well imagine and well understand [its reaction]
GM vice-president John Smith

What next for GM in Europe?

Magna's plans for job cuts at Opel and Vauxhall totalled 10,500, including 4,000 in Germany.

At Vauxhall, Unite last month reached a deal with Magna to limit any UK cuts to 600, and all through voluntary redundancies.

Unite will now have to seek a fresh agreement with GM.

Business Secretary Lord Mandelson said earlier on Wednesday that he was keen for "very early discussions" with GM over how its plans affect the Vauxhall workers.

'Ugly face'

Earlier GM's decision to hold onto Opel and Vauxhall was welcomed in the UK, but sparked anger in Germany.

Mr Woodley, himself a former Vauxhall worker, said it was a "fantastic decision", while unions in Germany said workers would begin walk-outs from Thursday in protest at GM's decision.

Mr Smith said GM would repay the German loan in full "if we're requested to do so" by Germany, saying GM had already paid back some of the funds.

Ellesmere Port staff react to the GM U-turn

Juergen Ruettgers, premier of the German state of North Rhine-Westphalia, where there are fears that the Opel plant in Bochum could now face closure, called GM's decision to hold onto Opel as "the ugly face of turbo-capitalism".

Mr Smith said he acknowledged that "the German government had a very strong appetite for the Magna proposal, so I can well imagine and well understand" the German reaction.

"I am hopeful they will find merit in our plan," he said.

=====================

somebody has to go. and who would that be?

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http://www.bloomberg.com/apps/news?pid=20601087&sid=a98aM2w2bVZs&pos=1

U.S. Economy: Unemployment Rate Jumps to 26-Year High (Update2)
By Timothy R. Homan

Nov. 6 (Bloomberg) -- The unemployment rate in the U.S. jumped to 10.2 percent in October, the highest level since 1983, casting a pall over the prospects for a sustained recovery and risking further erosion of President Barack Obama’s popularity.

Payrolls fell by 190,000 last month, more than forecast by economists, a Labor Department report showed today 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 rose 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 today extending jobless benefits, to promise fresh measures to help put some of the 15.7 million unemployed Americans back to work.

“We will certainly have very bad payroll numbers in November and December,” said Harm Bandholz, an economist at UniCredit Global Research in New York, whose forecast for a 10.1 percent unemployment rate matched the highest among economists surveyed by Bloomberg. “We don’t foresee businesses going on a hiring spree anytime soon.”

Two-year note yields fell four basis points, or 0.03 percentage point, to 0.84 percent at 4:45 p.m. in New York. The yield touched 0.83 percent, the lowest since Oct. 2. The Standard & Poor’s 500 Stock Index closed up 0.3% to 1069.30 after falling as much as 0.7 percent.

Steeper Drop

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.

Obama signed into law a measure extending a tax credit of up to $8,000 for homebuyers and benefits for unemployed workers, and 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 today at the White House.

Jason McKinnon, 34, a San Francisco resident, is among those who could benefit from the measure Obama signed today to add up to 20 additional weeks of unemployment insurance.

Expired Benefits

McKinnon lost his $18-an-hour job in April as a video-game software analyst, and last month his benefits ran out. He said he has sent out hundreds of resumes to companies such as Facebook Inc. and Sony Corp., received about 50 responses and no offers. “I’m feeling like there’s less jobs out there and more qualified people,” he said in a telephone interview. Now he plans to take night classes at City College of San Francisco to improve his chances.

For congressional Democrats facing challengers in midterm elections next year, the continuing erosion in the job market puts them at political 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 entire House of Representatives, 34 senators and 37 governors are up for re-election in 2010.

Since Obama took office in January, the economy has lost 3.49 million jobs. 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.

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.

Under-Employment Record

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 from 17 percent in September, today’s report showed.

“We’ve got lots of people just giving up and leaving the labor force,” said Julia Coronado, a former Fed economist who now works 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.”

Some people are pulling up stakes and moving to where they think the job prospects may be brighter. Beth Rubin, 41, lost her position as a receptionist at the law firm Goldstein Bershad & Fried, PC in Southfield, Michigan, in October. The resident of Ferndale, a Detroit suburb, is now selling her furniture and moving to Georgia. “I’m looking to get a job in Georgia, and I don’t know about the job market there, but I can tell you Michigan is horrible,” Rubin said in a telephone interview.

Average Work Week

The average work week held at a record low of 33 hours in October, while 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.

Some companies are cutting payrolls amid concern spending will cool as government-assistance programs wane. The New Brunswick, New Jersey-based Johnson & Johnson, the world’s largest health-products company, said Nov. 3 it will shrink its workforce by as much as 7,000 workers.

Factory payrolls dropped 61,000 after decreasing 45,000 in the prior month, today’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.

Auto Sales

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.

Inventories at U.S. wholesalers dropped in September for a 13th consecutive month, a separate report today from the Commerce Department showed, clearing the way for a pickup in orders as sales improve.

Today’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.

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.

‘Very Ugly’

“The rise in the unemployment rate is very ugly,” Ethan Harris, head of North America economic research at BofA Merrill Lynch Global Research, said in an interview with Bloomberg Television in New York.

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 consumers to spend more on homes and automobiles.

Some companies are gaining confidence. Deere & Co., the world’s largest maker of agricultural equipment, said last week it’s recalling 452 workers, the majority of manufacturing employees dismissed earlier this year at a factory in Iowa.

Fed officials met in Washington this week and signaled that a return to economic growth alone won’t result in higher interest rates. Economist Joseph LaVorgna of Deutsche Bank Securities Inc. in New York said in a note to clients that the central bank “has never raised rates with unemployment rising.”

To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net
Last Updated: November 6, 2009 16:52 EST

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http://www.nytimes.com/2009/11/07/business/economy/07econ.html

Broader Measure of U.S. Unemployment Stands at 17.5%
By DAVID LEONHARDT
Published: November 6, 2009

For all the pain caused by the Great Recession, the job market still was not in as bad shape as it had been during the depths of the early 1980s recession — until now.

With the release of the jobs report on Friday, the broadest measure of unemployment and underemployment tracked by the Labor Department has reached its highest level in decades. If statistics went back so far, the measure would almost certainly be at its highest level since the Great Depression.

In all, more than one out of every six workers — 17.5 percent — were unemployed or underemployed in October. The previous recorded high was 17.1 percent, in December 1982.

This includes the officially unemployed, who have looked for work in the last four weeks. It also includes discouraged workers, who have looked in the past year, as well as millions of part-time workers who want to be working full time.

The official jobless rate — 10.2 percent in October, up from 9.8 percent in September — remains lower than the early 1980s peak of 10.8 percent.

The broader rate is highest today, sometimes 20 percent, in states that had big housing bubbles, like California and Arizona, or that have large manufacturing sectors, like Michigan, Ohio, Oregon, Rhode Island and South Carolina.

The new benchmark is a sign of just how much damage financial crises tend to inflict. A recent book by Carmen M. Reinhart and Kenneth S. Rogoff, two economists, found that over the last century the typical crisis had caused the jobless rate in the country where it occurred to rise for almost five years. By that standard, the jobless rate here would continue rising for two more years, through the end of 2011.

Most economists predict that the rate will in fact begin to fall next year, largely because of the federal government’s aggressive response — fiscal stimulus, interest-rate cuts and a variety of creative steps by the Federal Reserve and Treasury Department. Friday’s report showed that monthly job losses continued to slow recently, though the improvement has been gradual.

At the White House Friday, President Obama signed a bill to extend unemployment benefits and a tax credit for home buyers, and said that he was looking at ways to enact more stimulus. On Wednesday, the Fed announced that it expected to leave its benchmark interest at zero for “an extended period.”

Nearly 16 million people are now unemployed and more than seven million jobs have been lost since late 2007.

Officially, the Labor Department’s broad measure of unemployment goes back only to 1994. But early this year, with the help of economists at the department, The New York Times created a version that estimates it going back to 1970. If such a measure were available for the Depression, it probably would have exceeded 30 percent.

Compared with the early 1980s, a smaller share of workers today are officially unemployed and a smaller share are considered discouraged workers.

But there are many more people who would like to be working full time and have been able to find only part-time work, according to the government’s monthly survey of workers. The rapid increase in their ranks and in the officially unemployed has caused the rate to rise much faster in this recession than in the early 1980s. Two years ago, it was only 8.2 percent.

One of the more striking aspects of the Great Recession is that most of its impact has fallen on a relatively narrow group of workers. This is evident primarily in two ways.

First, the number of people who have experienced any unemployment is surprisingly low, given the severity of the recession. The pace of layoffs has increased, but the peak layoff rate this year was the same as it was during the 2001 recession, which was a fairly mild downturn. The main reason that the unemployment rate has soared is the hiring rate has plummeted.

So fewer workers than might be expected have lost their jobs. But those without work are paying a steep price, because finding a new job is extremely difficult.

Second, wages have continued to rise for most people who still have jobs. The average hourly wage for rank-and-file workers, who make up about four-fifths of the work force, actually accelerated in October, according to the new report.

Even though some companies have cut the pay of workers, the average hourly wage has still risen 1.5 to 2.5 percent over the last year, depending on which government survey is examined. Average weekly pay has risen less — zero to 1 percent — because hours have been cut. But average prices have fallen. Altogether, the typical worker has received a 1 to 2 percent inflation-adjusted raise over the last year.

In the other two severe recessions in recent decades, workers with jobs fared considerably worse. At the same point in the mid-1970s downturn, real weekly pay had fallen 7 percent; in the early 1980s recession, it had fallen 4 percent.

It is a strange combination: workers who still have a job are doing better than in other deep recessions, but the unemployment and underemployment have risen to their highest level since the Depression.