www.jobberz.com
By Jeff Harrington, Times Staff Writer
As Florida's unemployment soared to 9.4 percent in February — and crept into double digits in the bay area — a familiar culprit lurked behind the data.
Construction jobs, or lack thereof.
Construction accounted for 40 percent of the nearly 50,000 jobs lost statewide from January to February, according to seasonally adjusted figures released Friday. Florida's construction work force has been retreating for nearly three years. In the past year alone, the industry has shed 115,000 jobs, shrinking by 21 percent.
It's no secret that the housing bust paved the way into the recession. Now there's mounting evidence it's keeping the state from climbing out of its economic doldrums.
Blame two fronts. First, we're still waiting for a housing recovery, and second, the credit crunch means builders of office parks and shopping centers can't get financing. They are idle and laying off workers.
"Nonresidential construction had been relatively strong up until the end of last year," when credit for new projects dried up, said Scott Brown, chief economist with Raymond James Financial in St. Petersburg.
"Now we're in the middle of financial panic, and you don't just unpanic. It takes time before confidence is restored."
Many of the states at the epicenter of the recession were epicenters of the housing boom. California's unemployment rate just reached 10.5 percent; Nevada is at 10.1 percent. That goes a long way in explaining why Florida's unemployment rate, now hovering near a 33-year high, far outpaces the national average of 8.1 percent.
It also explains why Cape Coral/Fort Myers (12 percent) is witnessing among the highest unemployment rates among Florida metro areas. In the past couple of years, Cape Coral has transformed from one of hottest housing markets in the country to the second-worst foreclosure rate behind Las Vegas, with one out of every 65 units in the foreclosure process last month.
Nearly three years into the housing slump, new home construction in Florida is still off by double digits year over year. Foreclosures are partly to blame. Why order a new home from a builder when a foreclosure is available more cheaply down the street?
"There's very little incentive for builders to put new products on the market," said Sean Snaith, director of the University of Central Florida's Institute for Economic Competitiveness. "We think construction will continue to decline, probably through 2010, because there's so much product out there."
Rising layoffs are feeding the problem. Higher unemployment translates into less demand for offices, which puts even more contractors out of work.
While plenty of office building construction is on hold, the recession has also eaten into the renovations business. When tenants change offices, floor plans usually get a thorough makeover. That's not happening much lately, said Tom Kennedy, a real estate broker with Grubb & Ellis Commercial Florida.
"Businesses have been very quick to lay off people and conserve their resources," Kennedy said.
Real estate industry veterans have come to the aid of their laid-off colleagues, most prominently with Real Estate Lives, organized by Tampa real estate attorney Ron Weaver.
Weaver's group is working with 168 unemployed people so far. This week it alerted clients to openings for a civil engineer, a construction project manager and title company workers.
"We've gotten over 100 major job leads and have placed 24 people," Weaver said.
Though it's leading the pack, construction has plenty of company in the job loss category. Year over year, professional and business services lost about 100,000 jobs in Florida, while the category of trade, transportation and utilities contracted by 86,500 jobs.
The job count in the state's most resilient industry, health care, slipped slightly month-to-month but is still up 2 percent from a year ago.
Some economists have projected that the national unemployment rate will climb toward 10 percent this year, with hard-hit states like Florida and California continuing to outpace the rest of the country.
"There's no real definition of a depression, but some would say whenever you have double-digit unemployment for an extended period of time, it qualifies," said Brown of Raymond James Financial. "So we're getting closer to that in Florida."
Rebecca Rust, chief economist with the Florida Agency for Workforce Innovation, which oversees the unemployment program, dismissed talk of depression. She said the term should only be used for comparisons on a national level.
Nevertheless, Rust deemed the current recession the worst since 1974-75 and said Florida's economy is expected to worsen throughout the year.
In past recessions, unemployment has been a lagging indicator, continuing to rise even after the economy started rebounding. The latest state analysis used for budgeting purposes predicted Florida's unemployment would peak at 10.2 percent in the first quarter of 2010.
Florida's jump in February, which represents 874,000 jobless out of a labor force of 9.25 million, is up significantly from January's revised rate of 8.8 percent. A year ago, Florida's unemployment was 4.3 percent. Not included in the breakdown are discouraged jobless who are no longer actively seeking work.
The Tampa Bay area's unemployment rate hit 10.2 percent, with Hernando County suffering the most at 12.7 percent. The bay area has shed more than 51,000 jobs over the year, third-highest among Florida metro areas.
Times staff writer James Thorner contributed to this report. Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.
Sunday, March 29, 2009
Union out in force over job-loss fears
www.jobberz.com
NORWALK
By STEVE KOBAK
Hour Staff Writer
About 60 AT&T employees marched in front of CVS on the corner of Connecticut Avenue and Willard Street to protest layoffs and cutbacks by the phone carrier service despite a reported spike in profits.
The protest -- which took place down the street from AT&T's Norwalk branch -- occurred as Communications Workers of America Local 1298 officials were negotiating a new contract. The current union contract expires April 4.
"All we want is to keep our jobs and our standard of living," said Mike Duffy, a steward for Local 1298 and a 10-year AT&T employee. "I want to be able to go home every night to my family and know I have job security."
The Norwalk protest was one of a handful of statewide demonstrations held by Local 1298 to get the word out about the layoffs and a possible strike that will occur if contract negotiations fail.
AT&T announced in December that 12,000 employees nationwide would be laid off and Local 1298 members are worried that their jobs are in danger.
"It's about our livelihood and how we make a living," said Bruce Stern, an installation and repair technician for AT&T. "Every three or four years we have to go through this."
Union members were also incensed that layoffs took place despite the almost $1 billion revenue increase reported by the company in 2008.
Marching in front of a giant inflatable rat, protesters wore red shirts with Local 1298 logos and slogans like: "If provoked, will strike." Gilbert Pabellon, a 10-year AT&T employee who held a sign reading: "AT&T + AIG= Corporate Greed."
"The bottom line is I want a future," said Pabellon. "I want to support my family and I want to retire from this company."
Information on the negotiations was not available, as union officials were still in meetings with executives at press time.
NORWALK
By STEVE KOBAK
Hour Staff Writer
About 60 AT&T employees marched in front of CVS on the corner of Connecticut Avenue and Willard Street to protest layoffs and cutbacks by the phone carrier service despite a reported spike in profits.
The protest -- which took place down the street from AT&T's Norwalk branch -- occurred as Communications Workers of America Local 1298 officials were negotiating a new contract. The current union contract expires April 4.
"All we want is to keep our jobs and our standard of living," said Mike Duffy, a steward for Local 1298 and a 10-year AT&T employee. "I want to be able to go home every night to my family and know I have job security."
The Norwalk protest was one of a handful of statewide demonstrations held by Local 1298 to get the word out about the layoffs and a possible strike that will occur if contract negotiations fail.
AT&T announced in December that 12,000 employees nationwide would be laid off and Local 1298 members are worried that their jobs are in danger.
"It's about our livelihood and how we make a living," said Bruce Stern, an installation and repair technician for AT&T. "Every three or four years we have to go through this."
Union members were also incensed that layoffs took place despite the almost $1 billion revenue increase reported by the company in 2008.
Marching in front of a giant inflatable rat, protesters wore red shirts with Local 1298 logos and slogans like: "If provoked, will strike." Gilbert Pabellon, a 10-year AT&T employee who held a sign reading: "AT&T + AIG= Corporate Greed."
"The bottom line is I want a future," said Pabellon. "I want to support my family and I want to retire from this company."
Information on the negotiations was not available, as union officials were still in meetings with executives at press time.
Consumer spending up, but income sags on job cuts
www.jobberz.com
Consumer spending up, but income sags on job cuts
By MARTIN CRUTSINGER – 1 day ago
WASHINGTON (AP) — After a half year of declines, consumer spending edged up for a second month in February even though incomes sagged under the weight of further job losses. The spending increases were seen as a hopeful sign that this key sector of the economy is staging a modest rebound that could help pull the country out of the recession.
Consumer spending rose by 0.2 percent last month after an even bigger 1 percent jump in January, which was the largest one-month gain in 3 1/2 years, the Commerce Department reported Friday. Those gains followed a record six straight monthly declines as consumers tightened their belts in the face of a deepening recession.
Americans' incomes slipped further in February, dropping by 0.2 percent, the fourth drop in the past five months, as wages and salaries continued to be battered by the massive layoffs that have occurred as the recession, already the longest in a quarter century, has deepened.
Consumer belt-tightening has caused the personal savings rate, which was hovering near zero a year ago, to jump sharply. It stood at 4.2 percent in February after being at 4.4 percent in January. That was the first time in more than a decade that the savings rate has been above 4 percent for two straight months.
A separate report Friday showed that the Reuters-University of Michigan's survey of consumer confidence rose to 57.3 in March, still near a three-decade low but higher than the February reading of 56.3.
Economists said the slight rise in consumer confidence and the back-to-back increases in consumer spending after string of declines provided some reason to hope that at the very least the steep slide in the economy could be coming to an end.
"The fact that consumers have stopped retrenching is the most hopeful sign for the economy in a long time," said Mark Zandi, chief economist at Moody's Economy.com.
Consumer spending is closely followed because it accounts for about 70 percent of total economic activity. Spending fell at a rate of 3.8 percent in the July-September quarter and then by a 4.3 percent rate in the fourth quarter, the biggest quarterly drop in 28 years.
While economists had feared that spending would fall further in the current quarter, the results from January and February have led many economists to believe that this key sector could actually show a slight positive of around 1 percent.
The overall economy, as measured by the gross domestic product, fell at an annual rate of 6.3 percent, the government reported Thursday, the biggest GDP drop since 1982. Economists still believe that GDP will show a big decline in the January-March quarter, even if consumer spending turns positive just because of all the other negative forces weighing down growth at the moment from falling business spending to weak exports and continued declines in housing construction.
But analysts said the GDP decline could be a slightly less severe 5 percent in the first quarter, moderating to a 2.5 percent drop in the April-June quarter, a zero reading in the third quarter and a small positive of perhaps 1 percent in the fourth quarter.
Part of the reason analysts believe that any recovery will take awhile to begin are the ongoing problems in the financial sector which are keeping banks from resuming more normal lending to banks and businesses and the expected further wave of job layoffs in the months ahead as companies continue to slash payrolls.
And consumers, even if they stop slashing spending, are not expected to go on a buying spree anytime soon, given those job losses and the hit to their investment holdings.
"Consumers have lost massive amounts of wealth in their stock investments and their home prices. They are still feeling the pressure to boost savings," said Nigel Gault, an economist at IHS Global Insight.
The rebound in consumer spending and the slight uptick in consumer confidence followed better-than-expected readings earlier in the week showing that orders for big-ticket manufactured goods rose in February by 3.4 percent, the first increase after six monthly declines, while sales of both new and existing homes increased last month.
"I think we have seen the end of the biggest part of the downswing for the economy but it is going to take awhile for the economy to level off and then to start picking up," said David Wyss, chief economist at Standard & Poor's in New York.
He said the tax cuts which will soon start showing up in people's paychecks in the form of lower withholding amounts plus other parts of the $787 billion stimulus bill should start to bolster the economy. He predicted the recession will come to an end around September.
But Wyss and many other economists are looking for at-best a tepid recovery in the early stages, in part because of the severe problems facing the nation's financial sector and the need for many baby boomers, who are now approaching retirement, to rebuild their investments.
Bernard Baumohl, chief global economist at the Economic Outlook Group, said that Americans remain "unnerved and frightened by the loss in value of their homes and their investments, particularly retirement savings. This is their penance after a decade of excess borrowing and spending."
The consumer spending report showed that a price gauge tied to spending rose by 0.3 percent in February and was up 0.2 percent excluding food and energy, indicating that the recession has contributed to a significant moderate in inflation pressures.
Copyright © 2009 The Associated Press. All rights reserved.
Consumer spending up, but income sags on job cuts
By MARTIN CRUTSINGER – 1 day ago
WASHINGTON (AP) — After a half year of declines, consumer spending edged up for a second month in February even though incomes sagged under the weight of further job losses. The spending increases were seen as a hopeful sign that this key sector of the economy is staging a modest rebound that could help pull the country out of the recession.
Consumer spending rose by 0.2 percent last month after an even bigger 1 percent jump in January, which was the largest one-month gain in 3 1/2 years, the Commerce Department reported Friday. Those gains followed a record six straight monthly declines as consumers tightened their belts in the face of a deepening recession.
Americans' incomes slipped further in February, dropping by 0.2 percent, the fourth drop in the past five months, as wages and salaries continued to be battered by the massive layoffs that have occurred as the recession, already the longest in a quarter century, has deepened.
Consumer belt-tightening has caused the personal savings rate, which was hovering near zero a year ago, to jump sharply. It stood at 4.2 percent in February after being at 4.4 percent in January. That was the first time in more than a decade that the savings rate has been above 4 percent for two straight months.
A separate report Friday showed that the Reuters-University of Michigan's survey of consumer confidence rose to 57.3 in March, still near a three-decade low but higher than the February reading of 56.3.
Economists said the slight rise in consumer confidence and the back-to-back increases in consumer spending after string of declines provided some reason to hope that at the very least the steep slide in the economy could be coming to an end.
"The fact that consumers have stopped retrenching is the most hopeful sign for the economy in a long time," said Mark Zandi, chief economist at Moody's Economy.com.
Consumer spending is closely followed because it accounts for about 70 percent of total economic activity. Spending fell at a rate of 3.8 percent in the July-September quarter and then by a 4.3 percent rate in the fourth quarter, the biggest quarterly drop in 28 years.
While economists had feared that spending would fall further in the current quarter, the results from January and February have led many economists to believe that this key sector could actually show a slight positive of around 1 percent.
The overall economy, as measured by the gross domestic product, fell at an annual rate of 6.3 percent, the government reported Thursday, the biggest GDP drop since 1982. Economists still believe that GDP will show a big decline in the January-March quarter, even if consumer spending turns positive just because of all the other negative forces weighing down growth at the moment from falling business spending to weak exports and continued declines in housing construction.
But analysts said the GDP decline could be a slightly less severe 5 percent in the first quarter, moderating to a 2.5 percent drop in the April-June quarter, a zero reading in the third quarter and a small positive of perhaps 1 percent in the fourth quarter.
Part of the reason analysts believe that any recovery will take awhile to begin are the ongoing problems in the financial sector which are keeping banks from resuming more normal lending to banks and businesses and the expected further wave of job layoffs in the months ahead as companies continue to slash payrolls.
And consumers, even if they stop slashing spending, are not expected to go on a buying spree anytime soon, given those job losses and the hit to their investment holdings.
"Consumers have lost massive amounts of wealth in their stock investments and their home prices. They are still feeling the pressure to boost savings," said Nigel Gault, an economist at IHS Global Insight.
The rebound in consumer spending and the slight uptick in consumer confidence followed better-than-expected readings earlier in the week showing that orders for big-ticket manufactured goods rose in February by 3.4 percent, the first increase after six monthly declines, while sales of both new and existing homes increased last month.
"I think we have seen the end of the biggest part of the downswing for the economy but it is going to take awhile for the economy to level off and then to start picking up," said David Wyss, chief economist at Standard & Poor's in New York.
He said the tax cuts which will soon start showing up in people's paychecks in the form of lower withholding amounts plus other parts of the $787 billion stimulus bill should start to bolster the economy. He predicted the recession will come to an end around September.
But Wyss and many other economists are looking for at-best a tepid recovery in the early stages, in part because of the severe problems facing the nation's financial sector and the need for many baby boomers, who are now approaching retirement, to rebuild their investments.
Bernard Baumohl, chief global economist at the Economic Outlook Group, said that Americans remain "unnerved and frightened by the loss in value of their homes and their investments, particularly retirement savings. This is their penance after a decade of excess borrowing and spending."
The consumer spending report showed that a price gauge tied to spending rose by 0.3 percent in February and was up 0.2 percent excluding food and energy, indicating that the recession has contributed to a significant moderate in inflation pressures.
Copyright © 2009 The Associated Press. All rights reserved.
Consumer spending up, but income sags on job cuts
www.jobberz.com
Consumer spending up, but income sags on job cuts
By MARTIN CRUTSINGER – 1 day ago
WASHINGTON (AP) — After a half year of declines, consumer spending edged up for a second month in February even though incomes sagged under the weight of further job losses. The spending increases were seen as a hopeful sign that this key sector of the economy is staging a modest rebound that could help pull the country out of the recession.
Consumer spending rose by 0.2 percent last month after an even bigger 1 percent jump in January, which was the largest one-month gain in 3 1/2 years, the Commerce Department reported Friday. Those gains followed a record six straight monthly declines as consumers tightened their belts in the face of a deepening recession.
Americans' incomes slipped further in February, dropping by 0.2 percent, the fourth drop in the past five months, as wages and salaries continued to be battered by the massive layoffs that have occurred as the recession, already the longest in a quarter century, has deepened.
Consumer belt-tightening has caused the personal savings rate, which was hovering near zero a year ago, to jump sharply. It stood at 4.2 percent in February after being at 4.4 percent in January. That was the first time in more than a decade that the savings rate has been above 4 percent for two straight months.
A separate report Friday showed that the Reuters-University of Michigan's survey of consumer confidence rose to 57.3 in March, still near a three-decade low but higher than the February reading of 56.3.
Economists said the slight rise in consumer confidence and the back-to-back increases in consumer spending after string of declines provided some reason to hope that at the very least the steep slide in the economy could be coming to an end.
"The fact that consumers have stopped retrenching is the most hopeful sign for the economy in a long time," said Mark Zandi, chief economist at Moody's Economy.com.
Consumer spending is closely followed because it accounts for about 70 percent of total economic activity. Spending fell at a rate of 3.8 percent in the July-September quarter and then by a 4.3 percent rate in the fourth quarter, the biggest quarterly drop in 28 years.
While economists had feared that spending would fall further in the current quarter, the results from January and February have led many economists to believe that this key sector could actually show a slight positive of around 1 percent.
The overall economy, as measured by the gross domestic product, fell at an annual rate of 6.3 percent, the government reported Thursday, the biggest GDP drop since 1982. Economists still believe that GDP will show a big decline in the January-March quarter, even if consumer spending turns positive just because of all the other negative forces weighing down growth at the moment from falling business spending to weak exports and continued declines in housing construction.
But analysts said the GDP decline could be a slightly less severe 5 percent in the first quarter, moderating to a 2.5 percent drop in the April-June quarter, a zero reading in the third quarter and a small positive of perhaps 1 percent in the fourth quarter.
Part of the reason analysts believe that any recovery will take awhile to begin are the ongoing problems in the financial sector which are keeping banks from resuming more normal lending to banks and businesses and the expected further wave of job layoffs in the months ahead as companies continue to slash payrolls.
And consumers, even if they stop slashing spending, are not expected to go on a buying spree anytime soon, given those job losses and the hit to their investment holdings.
"Consumers have lost massive amounts of wealth in their stock investments and their home prices. They are still feeling the pressure to boost savings," said Nigel Gault, an economist at IHS Global Insight.
The rebound in consumer spending and the slight uptick in consumer confidence followed better-than-expected readings earlier in the week showing that orders for big-ticket manufactured goods rose in February by 3.4 percent, the first increase after six monthly declines, while sales of both new and existing homes increased last month.
"I think we have seen the end of the biggest part of the downswing for the economy but it is going to take awhile for the economy to level off and then to start picking up," said David Wyss, chief economist at Standard & Poor's in New York.
He said the tax cuts which will soon start showing up in people's paychecks in the form of lower withholding amounts plus other parts of the $787 billion stimulus bill should start to bolster the economy. He predicted the recession will come to an end around September.
But Wyss and many other economists are looking for at-best a tepid recovery in the early stages, in part because of the severe problems facing the nation's financial sector and the need for many baby boomers, who are now approaching retirement, to rebuild their investments.
Bernard Baumohl, chief global economist at the Economic Outlook Group, said that Americans remain "unnerved and frightened by the loss in value of their homes and their investments, particularly retirement savings. This is their penance after a decade of excess borrowing and spending."
The consumer spending report showed that a price gauge tied to spending rose by 0.3 percent in February and was up 0.2 percent excluding food and energy, indicating that the recession has contributed to a significant moderate in inflation pressures.
Copyright © 2009 The Associated Press. All rights reserved.
Consumer spending up, but income sags on job cuts
By MARTIN CRUTSINGER – 1 day ago
WASHINGTON (AP) — After a half year of declines, consumer spending edged up for a second month in February even though incomes sagged under the weight of further job losses. The spending increases were seen as a hopeful sign that this key sector of the economy is staging a modest rebound that could help pull the country out of the recession.
Consumer spending rose by 0.2 percent last month after an even bigger 1 percent jump in January, which was the largest one-month gain in 3 1/2 years, the Commerce Department reported Friday. Those gains followed a record six straight monthly declines as consumers tightened their belts in the face of a deepening recession.
Americans' incomes slipped further in February, dropping by 0.2 percent, the fourth drop in the past five months, as wages and salaries continued to be battered by the massive layoffs that have occurred as the recession, already the longest in a quarter century, has deepened.
Consumer belt-tightening has caused the personal savings rate, which was hovering near zero a year ago, to jump sharply. It stood at 4.2 percent in February after being at 4.4 percent in January. That was the first time in more than a decade that the savings rate has been above 4 percent for two straight months.
A separate report Friday showed that the Reuters-University of Michigan's survey of consumer confidence rose to 57.3 in March, still near a three-decade low but higher than the February reading of 56.3.
Economists said the slight rise in consumer confidence and the back-to-back increases in consumer spending after string of declines provided some reason to hope that at the very least the steep slide in the economy could be coming to an end.
"The fact that consumers have stopped retrenching is the most hopeful sign for the economy in a long time," said Mark Zandi, chief economist at Moody's Economy.com.
Consumer spending is closely followed because it accounts for about 70 percent of total economic activity. Spending fell at a rate of 3.8 percent in the July-September quarter and then by a 4.3 percent rate in the fourth quarter, the biggest quarterly drop in 28 years.
While economists had feared that spending would fall further in the current quarter, the results from January and February have led many economists to believe that this key sector could actually show a slight positive of around 1 percent.
The overall economy, as measured by the gross domestic product, fell at an annual rate of 6.3 percent, the government reported Thursday, the biggest GDP drop since 1982. Economists still believe that GDP will show a big decline in the January-March quarter, even if consumer spending turns positive just because of all the other negative forces weighing down growth at the moment from falling business spending to weak exports and continued declines in housing construction.
But analysts said the GDP decline could be a slightly less severe 5 percent in the first quarter, moderating to a 2.5 percent drop in the April-June quarter, a zero reading in the third quarter and a small positive of perhaps 1 percent in the fourth quarter.
Part of the reason analysts believe that any recovery will take awhile to begin are the ongoing problems in the financial sector which are keeping banks from resuming more normal lending to banks and businesses and the expected further wave of job layoffs in the months ahead as companies continue to slash payrolls.
And consumers, even if they stop slashing spending, are not expected to go on a buying spree anytime soon, given those job losses and the hit to their investment holdings.
"Consumers have lost massive amounts of wealth in their stock investments and their home prices. They are still feeling the pressure to boost savings," said Nigel Gault, an economist at IHS Global Insight.
The rebound in consumer spending and the slight uptick in consumer confidence followed better-than-expected readings earlier in the week showing that orders for big-ticket manufactured goods rose in February by 3.4 percent, the first increase after six monthly declines, while sales of both new and existing homes increased last month.
"I think we have seen the end of the biggest part of the downswing for the economy but it is going to take awhile for the economy to level off and then to start picking up," said David Wyss, chief economist at Standard & Poor's in New York.
He said the tax cuts which will soon start showing up in people's paychecks in the form of lower withholding amounts plus other parts of the $787 billion stimulus bill should start to bolster the economy. He predicted the recession will come to an end around September.
But Wyss and many other economists are looking for at-best a tepid recovery in the early stages, in part because of the severe problems facing the nation's financial sector and the need for many baby boomers, who are now approaching retirement, to rebuild their investments.
Bernard Baumohl, chief global economist at the Economic Outlook Group, said that Americans remain "unnerved and frightened by the loss in value of their homes and their investments, particularly retirement savings. This is their penance after a decade of excess borrowing and spending."
The consumer spending report showed that a price gauge tied to spending rose by 0.3 percent in February and was up 0.2 percent excluding food and energy, indicating that the recession has contributed to a significant moderate in inflation pressures.
Copyright © 2009 The Associated Press. All rights reserved.
Thursday, February 26, 2009
Jobless Claims Data Points to Possible 750k Loss in Nonfarm Payrolls
www.jobberz.com
(CEP News) - The upside surprise in U.S. initial jobless claims points to a continued deterioration of the U.S. labour market, and the possible loss of up to 750,000 jobs in February's official nonfarm payrolls report. Initial claims rose to 667k in the week ending Feb. 21, well above the 625k level economists had expected. The previous week's reading was also upwardly revised to 631k, the U.S. Department of Labor reported.
Continuing claims rose above expectations as well, coming in at 5.112 million compared to the 5.025 million expected.
Ken Maylan of ClearView Economics called the rise in initial claims "painful," but noted that on an adjusted basis, weekly claims exceeded 1 million claims in the 1982 recession.
The continued increase in claims isn't likely to end any time soon, according to HFE economist Ian Shepherdson. However, he also noted that the current level is still well short of the peaks reached in the mid-1970s and early 80s.
"We fervently hope that does not happen but we are not confident," he said in a client note. "Companies are throwing in the towel as they recognize that no sector is safe."
As a result, Shepherdson is forecasting February's official nonfarm payrolls report to show a loss of up to 750,000 jobs. That would follow a record loss of 598,000 jobs in January, which boosted the unemployment rate 0.6 percentage points to 7.2%.
Also in Thursday's jobless claims report, the less volatile four-week moving average for initial claims rose to 639,000, up from 620,000 in the week prior, while the four-week moving average for continuing claims rose to 4.932 million, up from 4.843 million in the previous week.
By Stephen Huebl, shuebl@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca
CEP Newswires - CEP News ? 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
(CEP News) - The upside surprise in U.S. initial jobless claims points to a continued deterioration of the U.S. labour market, and the possible loss of up to 750,000 jobs in February's official nonfarm payrolls report. Initial claims rose to 667k in the week ending Feb. 21, well above the 625k level economists had expected. The previous week's reading was also upwardly revised to 631k, the U.S. Department of Labor reported.
Continuing claims rose above expectations as well, coming in at 5.112 million compared to the 5.025 million expected.
Ken Maylan of ClearView Economics called the rise in initial claims "painful," but noted that on an adjusted basis, weekly claims exceeded 1 million claims in the 1982 recession.
The continued increase in claims isn't likely to end any time soon, according to HFE economist Ian Shepherdson. However, he also noted that the current level is still well short of the peaks reached in the mid-1970s and early 80s.
"We fervently hope that does not happen but we are not confident," he said in a client note. "Companies are throwing in the towel as they recognize that no sector is safe."
As a result, Shepherdson is forecasting February's official nonfarm payrolls report to show a loss of up to 750,000 jobs. That would follow a record loss of 598,000 jobs in January, which boosted the unemployment rate 0.6 percentage points to 7.2%.
Also in Thursday's jobless claims report, the less volatile four-week moving average for initial claims rose to 639,000, up from 620,000 in the week prior, while the four-week moving average for continuing claims rose to 4.932 million, up from 4.843 million in the previous week.
By Stephen Huebl, shuebl@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca
CEP Newswires - CEP News ? 2008. All Rights Reserved. www.economicnews.ca
The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.
A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.
Thrifts lost $3B in 4Q; post record annual loss
www.jobberz.com
By DANIEL WAGNER –
WASHINGTON (AP) — U.S. thrifts lost $3 billion in the fourth quarter and more than $13 billion last year, a record annual loss.
The Office of Thrift Supervision said Thursday that net losses last year surged to $13.44 billion, from $649 million in 2007. But the fourth-quarter loss was actually better than the $4.4 billion loss in the prior quarter and the $8.8 billion loss in the year-ago period.
Thrifts last year set aside $38.7 billion for losses on bad mortgages and other loans, the highest point since 1991, due mainly to increased mortgage delinquencies.
"While painful to the bottom line, the industry is better positioned to absorb loan losses," said James Caton, OTS director of financial monitoring.
Thrifts are important to consumer lending because they must have at least 65 percent of their lending in mortgages and other consumer loans.
But troubled assets now account for more than 2.5 percent of assets, up from nearly 1.7 percent a year ago.
Thrifts need to set aside so much money for loan losses because home prices likely will continue dropping "for some time," said OTS economist Sharon Stark. Northeastern cities with strong financial services industries will be especially hard hit, she added.
The yearly results exclude Seattle-based thrift Washington Mutual Inc., whose failure in September was the largest in U.S. history, and Pasadena, Calif-based IndyMac Bank, which failed in July. Their performance is included in 2007 figures.
JPMorgan Chase & Co., which acquired Washington Mutual's assets, said Thursday it will eliminate about 12,000 jobs as it folds in the company's operations.
There were 26 problem thrifts at the end of 2008, up from 11 a year earlier, but OTS director John Reich said two-thirds of the lending institutions remain profitable.
"What started out to be a housing problem ... has expanded to the broader economy," and now affects virtually all businesses and financial institutions, Reich said.
The agency, a part of the Treasury Department, is working with other regulators on a plan to streamline loan modifications. Thrift mortgage origination fell 43 percent last year to $404.9 billion from $716.2 billion in 2007.
Separately, Reich said the agency is launching a new unit to monitor thrifts with more than $10 billion in assets. The new "large bank unit" will be working onsite at about 25 thrifts.
The agency also will create new standards for reviewing enforcement actions on thrifts that do not meet minimum standards.
By DANIEL WAGNER –
WASHINGTON (AP) — U.S. thrifts lost $3 billion in the fourth quarter and more than $13 billion last year, a record annual loss.
The Office of Thrift Supervision said Thursday that net losses last year surged to $13.44 billion, from $649 million in 2007. But the fourth-quarter loss was actually better than the $4.4 billion loss in the prior quarter and the $8.8 billion loss in the year-ago period.
Thrifts last year set aside $38.7 billion for losses on bad mortgages and other loans, the highest point since 1991, due mainly to increased mortgage delinquencies.
"While painful to the bottom line, the industry is better positioned to absorb loan losses," said James Caton, OTS director of financial monitoring.
Thrifts are important to consumer lending because they must have at least 65 percent of their lending in mortgages and other consumer loans.
But troubled assets now account for more than 2.5 percent of assets, up from nearly 1.7 percent a year ago.
Thrifts need to set aside so much money for loan losses because home prices likely will continue dropping "for some time," said OTS economist Sharon Stark. Northeastern cities with strong financial services industries will be especially hard hit, she added.
The yearly results exclude Seattle-based thrift Washington Mutual Inc., whose failure in September was the largest in U.S. history, and Pasadena, Calif-based IndyMac Bank, which failed in July. Their performance is included in 2007 figures.
JPMorgan Chase & Co., which acquired Washington Mutual's assets, said Thursday it will eliminate about 12,000 jobs as it folds in the company's operations.
There were 26 problem thrifts at the end of 2008, up from 11 a year earlier, but OTS director John Reich said two-thirds of the lending institutions remain profitable.
"What started out to be a housing problem ... has expanded to the broader economy," and now affects virtually all businesses and financial institutions, Reich said.
The agency, a part of the Treasury Department, is working with other regulators on a plan to streamline loan modifications. Thrift mortgage origination fell 43 percent last year to $404.9 billion from $716.2 billion in 2007.
Separately, Reich said the agency is launching a new unit to monitor thrifts with more than $10 billion in assets. The new "large bank unit" will be working onsite at about 25 thrifts.
The agency also will create new standards for reviewing enforcement actions on thrifts that do not meet minimum standards.
Apple Board Forced Into Spotlight With Jobs on Leave
www.jobberz.com
By Connie Guglielmo
Feb. 26 (Bloomberg) -- Apple Inc.’s directors, after taking a back-seat role for years to Chief Executive Officer Steve Jobs, were forced to respond to investors yesterday as they pushed for an update on Jobs’s health.
Apple’s co-lead directors, Arthur Levinson and Bill Campbell, each answered questions at the company’s annual meeting on how the board has handled disclosures about Jobs’s health, succession planning and executive pay at Apple. In past years, Jobs has dominated the meeting, with board members sitting quietly in the first row of the audience.
“The dynamism of him controlling the meeting has changed,” Scott Adams, a representative of the American Federation of State, County and Municipal Employees, said in an interview after the meeting. His organization owns 18,218 Apple shares. In the past, “Jobs would not allow questions to go to directors.”
Standing up to address a packed room, Levinson, the CEO of Genentech Inc., said yesterday that “nothing has changed,” since Apple’s disclosure on Jan. 14 that Jobs was taking a five- month medical leave.
“He certainly remains the CEO -- he’s responsible and deeply involved in all strategic matters,” said Levinson, who’s served on Apple’s board since 2000. “If there’s new information that we deem important to disclose, that will happen. At this point we feel we’ve met all disclosure obligations and responsibilities.”
Apple’s Disclosures
Corporate governance experts have faulted Apple’s board, which includes former U.S. Vice President Al Gore and Google Inc. CEO Eric Schmidt, for not talking about Jobs’s health sooner and in more detail after concern about his weight loss last year caused movements in the stock price. Jobs, a cancer survivor, missed the annual meeting for the first time in more than a decade.
While giving shareholders updates isn’t a hard and fast rule, Apple’s board will probably be compelled to talk more about Jobs’s health if anything changes significantly, said Jahan Raissi, a partner at Shartsis Friese LLP in San Francisco. He was a former senior counsel in the enforcement division of the Securities and Exchange Commission.
“If in two months it comes out that something changed and people knew two months ago and they didn’t say anything, there could be hell to pay,” Raissi said in an interview. “If they don’t say anything more, then it’s reasonable to believe that the company doesn’t know any different information.”
Apple rose 93 cents to $92.09 at 9:33 a.m. New York time in Nasdaq Stock Market trading. The shares had gained 6.8 percent this year before today.
Biggest Assembly
Yesterday’s gathering -- held in the same auditorium at Apple’s Cupertino, California, headquarters where Jobs typically introduces new products -- was the biggest public assembly of directors at an annual meeting in the past three years.
Levinson and Intuit Inc. Chairman Campbell, seated in the front row, were flanked by four other independent directors: Gore, J. Crew Inc. CEO Millard “Mickey” Drexler, Avon Inc. CEO Andrea Jung and former International Business Machines Corp. finance chief Jerome York. The only board members absent were Jobs and Schmidt.
Last year, Jobs was joined by Gore, Schmidt, Levinson and Campbell. In 2007, Levinson, Campbell and Schmidt also attended.
On Jan. 5, Jobs said treatment for his weight loss was “relatively simple.” Nine days later, he announced he would take leave after learning his health issues were “more complex” than he originally thought.
SEC Probe
The SEC started an investigation into the disclosures to determine whether investors were misled, a person familiar with the matter said last month. The review doesn’t mean investigators have seen evidence of wrongdoing. Apple general Counsel Daniel Cooperman declined to comment on the SEC investigation yesterday.
Jobs, who co-founded Apple in 1976 and was ousted in a management coup in 1985, returned to lead the company in 1997. One of the first things he did was to replace all but two of the board members. His picks included Campbell, a former Apple executive, and York, an adviser to Tracinda Corp. CEO Kirk Kerkorian.
“It’s a very secretive culture, a very closed culture,” said Conrad Mackerron, director of corporate social responsibility for As You Sow, an environmental advocacy group in San Francisco. The group, which met with Jobs two years ago to talk about Apple’s environmental policies, submitted a shareholder proposal asking that the company provide more details on its effort to cut carbon emissions. “It’s hard to talk in an open manner.”
No Mobile Phones
Only shareholders were allowed into the meeting hall and able to ask questions. Reporters, and latecomers, watched the 75-minute event on video in a separate room. Apple banned the use of mobile phones, personal computers, cameras and recording devices. Apple typically doesn’t make a transcript of the event available.
Campbell, 68, used his time at the microphone to talk about the board’s decision to vote against a “say-on-pay” proposal. Campbell said the board wanted to retain the flexibility to reward executives as “we see fit.”
“You can sense there’s more disclosure,” in that board members were forced to answer questions, said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis, who has recommended investors buy Apple’s shares since June 2004. “It’s a good thing that Apple is more transparent.”
Investors still want more information, said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon.
“If I was a shareholder, I would have been upset if I heard them say, ‘He was fine, it’s a hormone imbalance’ and then nine days later, hear him say ‘I’m taking leave,’” said Hargreaves, who rates Apple shares “outperform.” “That’s misleading at best. It’s possible that things change that quickly. That’s why the lack of disclosure is disconcerting.”
To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net
By Connie Guglielmo
Feb. 26 (Bloomberg) -- Apple Inc.’s directors, after taking a back-seat role for years to Chief Executive Officer Steve Jobs, were forced to respond to investors yesterday as they pushed for an update on Jobs’s health.
Apple’s co-lead directors, Arthur Levinson and Bill Campbell, each answered questions at the company’s annual meeting on how the board has handled disclosures about Jobs’s health, succession planning and executive pay at Apple. In past years, Jobs has dominated the meeting, with board members sitting quietly in the first row of the audience.
“The dynamism of him controlling the meeting has changed,” Scott Adams, a representative of the American Federation of State, County and Municipal Employees, said in an interview after the meeting. His organization owns 18,218 Apple shares. In the past, “Jobs would not allow questions to go to directors.”
Standing up to address a packed room, Levinson, the CEO of Genentech Inc., said yesterday that “nothing has changed,” since Apple’s disclosure on Jan. 14 that Jobs was taking a five- month medical leave.
“He certainly remains the CEO -- he’s responsible and deeply involved in all strategic matters,” said Levinson, who’s served on Apple’s board since 2000. “If there’s new information that we deem important to disclose, that will happen. At this point we feel we’ve met all disclosure obligations and responsibilities.”
Apple’s Disclosures
Corporate governance experts have faulted Apple’s board, which includes former U.S. Vice President Al Gore and Google Inc. CEO Eric Schmidt, for not talking about Jobs’s health sooner and in more detail after concern about his weight loss last year caused movements in the stock price. Jobs, a cancer survivor, missed the annual meeting for the first time in more than a decade.
While giving shareholders updates isn’t a hard and fast rule, Apple’s board will probably be compelled to talk more about Jobs’s health if anything changes significantly, said Jahan Raissi, a partner at Shartsis Friese LLP in San Francisco. He was a former senior counsel in the enforcement division of the Securities and Exchange Commission.
“If in two months it comes out that something changed and people knew two months ago and they didn’t say anything, there could be hell to pay,” Raissi said in an interview. “If they don’t say anything more, then it’s reasonable to believe that the company doesn’t know any different information.”
Apple rose 93 cents to $92.09 at 9:33 a.m. New York time in Nasdaq Stock Market trading. The shares had gained 6.8 percent this year before today.
Biggest Assembly
Yesterday’s gathering -- held in the same auditorium at Apple’s Cupertino, California, headquarters where Jobs typically introduces new products -- was the biggest public assembly of directors at an annual meeting in the past three years.
Levinson and Intuit Inc. Chairman Campbell, seated in the front row, were flanked by four other independent directors: Gore, J. Crew Inc. CEO Millard “Mickey” Drexler, Avon Inc. CEO Andrea Jung and former International Business Machines Corp. finance chief Jerome York. The only board members absent were Jobs and Schmidt.
Last year, Jobs was joined by Gore, Schmidt, Levinson and Campbell. In 2007, Levinson, Campbell and Schmidt also attended.
On Jan. 5, Jobs said treatment for his weight loss was “relatively simple.” Nine days later, he announced he would take leave after learning his health issues were “more complex” than he originally thought.
SEC Probe
The SEC started an investigation into the disclosures to determine whether investors were misled, a person familiar with the matter said last month. The review doesn’t mean investigators have seen evidence of wrongdoing. Apple general Counsel Daniel Cooperman declined to comment on the SEC investigation yesterday.
Jobs, who co-founded Apple in 1976 and was ousted in a management coup in 1985, returned to lead the company in 1997. One of the first things he did was to replace all but two of the board members. His picks included Campbell, a former Apple executive, and York, an adviser to Tracinda Corp. CEO Kirk Kerkorian.
“It’s a very secretive culture, a very closed culture,” said Conrad Mackerron, director of corporate social responsibility for As You Sow, an environmental advocacy group in San Francisco. The group, which met with Jobs two years ago to talk about Apple’s environmental policies, submitted a shareholder proposal asking that the company provide more details on its effort to cut carbon emissions. “It’s hard to talk in an open manner.”
No Mobile Phones
Only shareholders were allowed into the meeting hall and able to ask questions. Reporters, and latecomers, watched the 75-minute event on video in a separate room. Apple banned the use of mobile phones, personal computers, cameras and recording devices. Apple typically doesn’t make a transcript of the event available.
Campbell, 68, used his time at the microphone to talk about the board’s decision to vote against a “say-on-pay” proposal. Campbell said the board wanted to retain the flexibility to reward executives as “we see fit.”
“You can sense there’s more disclosure,” in that board members were forced to answer questions, said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis, who has recommended investors buy Apple’s shares since June 2004. “It’s a good thing that Apple is more transparent.”
Investors still want more information, said Andy Hargreaves, an analyst at Pacific Crest Securities in Portland, Oregon.
“If I was a shareholder, I would have been upset if I heard them say, ‘He was fine, it’s a hormone imbalance’ and then nine days later, hear him say ‘I’m taking leave,’” said Hargreaves, who rates Apple shares “outperform.” “That’s misleading at best. It’s possible that things change that quickly. That’s why the lack of disclosure is disconcerting.”
To contact the reporter on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net
Limited Predicts First-Quarter Loss, Cuts 400 Jobs
www.jobberz.com
By Allison Abell Schwartz
Feb. 26 (Bloomberg) -- Limited Brands Inc., the owner of the Victoria’s Secret chain, predicted a first-quarter loss and cut 400 jobs as consumers reduce spending on lingerie.
The loss will be 7 cents to 12 cents a share, the Columbus, Ohio-based company said today. Eight analysts estimated profit of 2 cents a share, on average. Sales at stores open at least a year may decline by “high-single digits” on a percentage basis, executives said on a conference call with investors and analysts.
Saks Inc. and Macy’s Inc. are among retailers eliminating jobs to slash costs as declining home values and the highest unemployment in 16 years cause consumers to reduce spending. Limited is also suspending pay increases, reducing capital spending and slowing store growth, Chief Administrative Officer Martyn Redgrave said on the call.
“There is extraordinary uncertainty and lack of visibility in all of our businesses,” Redgrave said. “In this unprecedented environment, we are choosing to take aggressive actions.”
Limited fell 73 cents, or 8.2 percent, to $8.19 at 11:52 a.m. in New York Stock Exchange composite trading. The shares lost 11 percent this year before today.
Fourth-quarter net income dropped 96 percent to $16.1 million, or 5 cents a share, after a writedown on the value of its La Senza brand. Revenue fell 8.7 percent to $2.99 billion.
The retailer took a charge in the period for the elimination of about 10 percent of the jobs at its corporate headquarters. Most of the jobs cut at Limited Brands will remain on its payroll until March 7, spokeswoman Tammy Roberts Myers said in an e-mail.
Profit excluding the pretax impairment charge and severance costs was 68 cents a share, the company said. Fourteen analysts surveyed by Bloomberg estimated profit of 65 cents.
Full-year profit will be 60 cents to 85 cents, the company said. Fourteen analysts estimated profit of 88 cents, on average.
Limited’s 3,014 retail locations include Bath & Body Works and Henri Bendel as well as Victoria’s Secret.
To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.
Last Updated: February 26, 2009 11:55 EST
By Allison Abell Schwartz
Feb. 26 (Bloomberg) -- Limited Brands Inc., the owner of the Victoria’s Secret chain, predicted a first-quarter loss and cut 400 jobs as consumers reduce spending on lingerie.
The loss will be 7 cents to 12 cents a share, the Columbus, Ohio-based company said today. Eight analysts estimated profit of 2 cents a share, on average. Sales at stores open at least a year may decline by “high-single digits” on a percentage basis, executives said on a conference call with investors and analysts.
Saks Inc. and Macy’s Inc. are among retailers eliminating jobs to slash costs as declining home values and the highest unemployment in 16 years cause consumers to reduce spending. Limited is also suspending pay increases, reducing capital spending and slowing store growth, Chief Administrative Officer Martyn Redgrave said on the call.
“There is extraordinary uncertainty and lack of visibility in all of our businesses,” Redgrave said. “In this unprecedented environment, we are choosing to take aggressive actions.”
Limited fell 73 cents, or 8.2 percent, to $8.19 at 11:52 a.m. in New York Stock Exchange composite trading. The shares lost 11 percent this year before today.
Fourth-quarter net income dropped 96 percent to $16.1 million, or 5 cents a share, after a writedown on the value of its La Senza brand. Revenue fell 8.7 percent to $2.99 billion.
The retailer took a charge in the period for the elimination of about 10 percent of the jobs at its corporate headquarters. Most of the jobs cut at Limited Brands will remain on its payroll until March 7, spokeswoman Tammy Roberts Myers said in an e-mail.
Profit excluding the pretax impairment charge and severance costs was 68 cents a share, the company said. Fourteen analysts surveyed by Bloomberg estimated profit of 65 cents.
Full-year profit will be 60 cents to 85 cents, the company said. Fourteen analysts estimated profit of 88 cents, on average.
Limited’s 3,014 retail locations include Bath & Body Works and Henri Bendel as well as Victoria’s Secret.
To contact the reporter on this story: Allison Abell Schwartz in New York at aabell@bloomberg.net.
Last Updated: February 26, 2009 11:55 EST
Saturday, February 21, 2009
UW-L cutting $5 million, job losses possible
http://www.lacrossetribune.com/articles/2009/02/19/news/01uwl.txt
www.jobberz.com
The University of Wisconsin-La Crosse will likely cut $5 million from its budget in the next two years.
UW-L’s administration had been planning for cuts anywhere from $2 million to $6 million.
UW-La Crosse senior Nicole Holden takes notes during her Program Planning in Recreation class Wednesday at Wimberly Hall. UW-la Crosse is expected to cut $5 million of their budget over the next two years but aims to preserve a quality classroom experience when doing so. PETER THOMSON photo
“It is like going to the doctor when you have a problem,” said UW-L Chancellor Joe Gow. “You hope it’s not as bad as it might be — our problem is: It is as bad as it might be.”
Gow said while he can’t rule out staffing cuts, he hopes enough savings can be found elsewhere.
Five million dollars is about 6 percent of UW-L’s $82 million general program revenue budget.
UW-L will have to deal with cuts, while trying to grow enrollment and continuing hiring through the Growth, Quality and Access plan.
“We want to protect the classroom experience for students,” said Gow. “We’ll need to take a careful look at all the other things we do.”
UW-L will evaluate vacant positions. If that doesn’t produce enough savings, the university could be forced to layoff workers, said Gow.
“Personally, that is the hardest part of this situation and the biggest challenge that anyone that is leading a university will face,” said Gow. “We are going to make every effort to get though this with minimal job loss.”
Since the UW System Regents have yet to set tuition levels for the next two years, UW-L isn’t sure how much will be offset by increased tuition. UW-L officials estimated the $5 million based on possible 5.5 percent tuition increases each year over the next two years.
The budget calculations also figure in money from the federal stimulus package.
“People had hoped the federal money would soften impact,” Gow. “But this recession is so severe that even with federal money we will still need to make cuts.”
UW-L will continue Growth, Quality and Access hiring with an emphasis on classroom teachers, said Gow.
“We’ve made a commitment to students. The tuition was increased to provide them more teachers, more sections of classes and smaller classes, and we have to live up to that commitment,” said Gow.
Other schools, for the most part, aren’t hiring so UW-L is attracting some amazing candidates, said Gow.
“That is the only silver lining in this whole thing,” he said.
Building plans at UW-L such as the stadium, academic building and residence halls are not funded though the state’s operating budget, and aren’t affected, Gow said.
Western Technical College has calculated a possible impact of $350,000 in cuts over the next two years, said Western President Lee Rasch.
The college will know more after details come from the system. It hopes any staffing cuts will be through attrition, he said.
“The challenge will be trying to increase capacity to serve more students, particularly dislocated workers,” said Rasch.
Although Viterbo University was not directly affected by the governor’s budget, President Rick Artman said he was grateful for the governor’s support through the three percent increase over the next two years in the Wisconsin Tuition Grant for need-based students attending private colleges in Wisconsin.
History
In the last three bienniums, UW-L has had budget cuts amounting to $9.5 million and a total loss of 70 faculty and staff positions.
2001-03 biennium: UW System had $55 million in cuts, meaning a loss of $2 million for UW-L.
2003-05 biennium: UW System had $100 million in cuts, meaning a loss of $4.2 million for UW-L.
2005-07 biennium: UW System had $90 million in cuts, meaning a loss of $3.3 million for UW-L.
www.jobberz.com
The University of Wisconsin-La Crosse will likely cut $5 million from its budget in the next two years.
UW-L’s administration had been planning for cuts anywhere from $2 million to $6 million.
UW-La Crosse senior Nicole Holden takes notes during her Program Planning in Recreation class Wednesday at Wimberly Hall. UW-la Crosse is expected to cut $5 million of their budget over the next two years but aims to preserve a quality classroom experience when doing so. PETER THOMSON photo
“It is like going to the doctor when you have a problem,” said UW-L Chancellor Joe Gow. “You hope it’s not as bad as it might be — our problem is: It is as bad as it might be.”
Gow said while he can’t rule out staffing cuts, he hopes enough savings can be found elsewhere.
Five million dollars is about 6 percent of UW-L’s $82 million general program revenue budget.
UW-L will have to deal with cuts, while trying to grow enrollment and continuing hiring through the Growth, Quality and Access plan.
“We want to protect the classroom experience for students,” said Gow. “We’ll need to take a careful look at all the other things we do.”
UW-L will evaluate vacant positions. If that doesn’t produce enough savings, the university could be forced to layoff workers, said Gow.
“Personally, that is the hardest part of this situation and the biggest challenge that anyone that is leading a university will face,” said Gow. “We are going to make every effort to get though this with minimal job loss.”
Since the UW System Regents have yet to set tuition levels for the next two years, UW-L isn’t sure how much will be offset by increased tuition. UW-L officials estimated the $5 million based on possible 5.5 percent tuition increases each year over the next two years.
The budget calculations also figure in money from the federal stimulus package.
“People had hoped the federal money would soften impact,” Gow. “But this recession is so severe that even with federal money we will still need to make cuts.”
UW-L will continue Growth, Quality and Access hiring with an emphasis on classroom teachers, said Gow.
“We’ve made a commitment to students. The tuition was increased to provide them more teachers, more sections of classes and smaller classes, and we have to live up to that commitment,” said Gow.
Other schools, for the most part, aren’t hiring so UW-L is attracting some amazing candidates, said Gow.
“That is the only silver lining in this whole thing,” he said.
Building plans at UW-L such as the stadium, academic building and residence halls are not funded though the state’s operating budget, and aren’t affected, Gow said.
Western Technical College has calculated a possible impact of $350,000 in cuts over the next two years, said Western President Lee Rasch.
The college will know more after details come from the system. It hopes any staffing cuts will be through attrition, he said.
“The challenge will be trying to increase capacity to serve more students, particularly dislocated workers,” said Rasch.
Although Viterbo University was not directly affected by the governor’s budget, President Rick Artman said he was grateful for the governor’s support through the three percent increase over the next two years in the Wisconsin Tuition Grant for need-based students attending private colleges in Wisconsin.
History
In the last three bienniums, UW-L has had budget cuts amounting to $9.5 million and a total loss of 70 faculty and staff positions.
2001-03 biennium: UW System had $55 million in cuts, meaning a loss of $2 million for UW-L.
2003-05 biennium: UW System had $100 million in cuts, meaning a loss of $4.2 million for UW-L.
2005-07 biennium: UW System had $90 million in cuts, meaning a loss of $3.3 million for UW-L.
www.jobberz.com
Automakers Seek $14 Billion More, Vowing Deep Cuts
DETROIT — The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.
In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales.
G.M., for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.
The Pontiac brand will have a much smaller role, if any, in G.M.’s future, and the company also said it would phase out its Saturn brand, which it once hoped would build small cars to counter the best of the Japanese brands.
G.M. also said it had made progress in discussions with the United Automobile Workers union and its bondholders to reduce its costs further.
The cash crisis will require fast action by the administration’s new cabinet-level Presidential Task Force on Autos, which is overseeing the reorganization of G.M. and Chrysler.
The deteriorating finances of the two companies present the Obama administration with two options, neither of them appealing.
It can provide the money in the hopes that the companies will stabilize, and no longer have to keep pushing workers into a growing pool of people without jobs. But there are no guarantees, as the Treasury Department learned on Tuesday when the automakers filed updates on their restructuring plans, that they might not be forced to come back again with requests for more money.
But if the federal government balks at the automakers’ requests, that would mean the two companies probably would have no choice but to file for bankruptcy protection, because they are losing hundreds of millions of dollars each month.
And the car companies said on Tuesday that the cost of a bankruptcy reorganization, with the government providing financing to help it through that process, would be far greater than their latest loan requests. Without such help, the companies would have to liquidate, creating staggering new job losses.
In a statement, the administration said Tuesday night that its task force would be reviewing the carmakers’ reports in coming days, adding that “more will be required from everyone involved — creditors, suppliers, dealers, labor and auto executives themselves — to ensure the viability of these companies going forward.”
The third Detroit auto company, Ford Motor, has not received federal assistance and has no requests pending.
By March 31, the presidential task force is expected to rule on whether G.M. and Chrysler have restructured enough to be viable businesses for the long term.
Big questions remain, including whether G.M. and Chrysler, as well as Ford, will be able to cut their unionized labor costs to parity with foreign automakers, as was required in the original loan agreement from last December.
The companies have been in marathon negotiations with the United Automobile Workers on reducing costs, as well as determining how they will finance health care trusts for retired blue-collar workers and their surviving spouses.
G.M. is also pushing for a deal with its bondholders to help it reduce its debt to $9 billion, from $27 billion. The U.A.W. said on Tuesday it had reached “understandings” with the Detroit companies on modifications to their contracts. Ron Gettelfinger, the union’s president, said “discussions are continuing” regarding how to fund the health care trusts at each of the companies.
Rick Wagoner, G.M.’s chief executive, said there had been “good progress” in talks with both the union and bondholders.
On the concessions in the U.A.W. contract, he said, “the things that have been negotiated really take a big bite out of what needed to accomplish.”
G.M.’s restructuring plan extends to its global operations. It will cut 47,000 jobs worldwide by the end of this year. It also said it would close 14 plants in North America by 2012 — five more than were included in its Dec. 2 loan request.
Mr. Wagoner said on Tuesday that the revamping plan was “comprehensive, responsive and achievable,” and could help the company break even by 2010. Both G.M. and Chrysler said they expected to begin paying back their federal loans by 20
Automakers Seek $14 Billion More, Vowing Deep Cuts
DETROIT — The price tag for bailing out General Motors and Chrysler jumped by another $14 billion Tuesday, to $39 billion, with the two automakers saying they would need the additional aid from the federal government to remain solvent.
In return, the two companies also promised to make further drastic cuts to all parts of their operations, in the hope that they can eventually strike a balance between their bloated cost structures and a dismal market for new car sales.
G.M., for example, said it would cut 47,000 more of its 244,000 workers worldwide; close five more plants in North America, leaving it with 33; and cut its lineup of brands in half, to just four: Chevrolet, Cadillac, GMC and Buick.
The Pontiac brand will have a much smaller role, if any, in G.M.’s future, and the company also said it would phase out its Saturn brand, which it once hoped would build small cars to counter the best of the Japanese brands.
G.M. also said it had made progress in discussions with the United Automobile Workers union and its bondholders to reduce its costs further.
The cash crisis will require fast action by the administration’s new cabinet-level Presidential Task Force on Autos, which is overseeing the reorganization of G.M. and Chrysler.
The deteriorating finances of the two companies present the Obama administration with two options, neither of them appealing.
It can provide the money in the hopes that the companies will stabilize, and no longer have to keep pushing workers into a growing pool of people without jobs. But there are no guarantees, as the Treasury Department learned on Tuesday when the automakers filed updates on their restructuring plans, that they might not be forced to come back again with requests for more money.
But if the federal government balks at the automakers’ requests, that would mean the two companies probably would have no choice but to file for bankruptcy protection, because they are losing hundreds of millions of dollars each month.
And the car companies said on Tuesday that the cost of a bankruptcy reorganization, with the government providing financing to help it through that process, would be far greater than their latest loan requests. Without such help, the companies would have to liquidate, creating staggering new job losses.
In a statement, the administration said Tuesday night that its task force would be reviewing the carmakers’ reports in coming days, adding that “more will be required from everyone involved — creditors, suppliers, dealers, labor and auto executives themselves — to ensure the viability of these companies going forward.”
The third Detroit auto company, Ford Motor, has not received federal assistance and has no requests pending.
By March 31, the presidential task force is expected to rule on whether G.M. and Chrysler have restructured enough to be viable businesses for the long term.
Big questions remain, including whether G.M. and Chrysler, as well as Ford, will be able to cut their unionized labor costs to parity with foreign automakers, as was required in the original loan agreement from last December.
The companies have been in marathon negotiations with the United Automobile Workers on reducing costs, as well as determining how they will finance health care trusts for retired blue-collar workers and their surviving spouses.
G.M. is also pushing for a deal with its bondholders to help it reduce its debt to $9 billion, from $27 billion. The U.A.W. said on Tuesday it had reached “understandings” with the Detroit companies on modifications to their contracts. Ron Gettelfinger, the union’s president, said “discussions are continuing” regarding how to fund the health care trusts at each of the companies.
Rick Wagoner, G.M.’s chief executive, said there had been “good progress” in talks with both the union and bondholders.
On the concessions in the U.A.W. contract, he said, “the things that have been negotiated really take a big bite out of what needed to accomplish.”
G.M.’s restructuring plan extends to its global operations. It will cut 47,000 jobs worldwide by the end of this year. It also said it would close 14 plants in North America by 2012 — five more than were included in its Dec. 2 loan request.
Mr. Wagoner said on Tuesday that the revamping plan was “comprehensive, responsive and achievable,” and could help the company break even by 2010. Both G.M. and Chrysler said they expected to begin paying back their federal loans by 20
Borders lays off 136 more Latest job cuts follow 2 years of losses topping $150 million
www.jobberz.com
Borders lays off 136 more Latest job cuts follow 2 years of losses topping $150 million
The Ann Arbor News
Beleaguered Borders Group Inc. marked another painful milestone in its quest to downsize and cut costs Thursday when it laid off 136 people, including 94 in Ann Arbor.
The changes mean total employment has dwindled at the bookseller's Ann Arbor headquarters on Varsity Drive from 1,300 several years ago to 770 today.
The latest job cuts follow two months of upheaval in the corporate ranks at Borders, which has been struggling to restructure and return to profitability after two straight years of losses topping $150 million. Financial results for 2008 will be released at the end of March.
In January, former chief executive George Jones was ousted and replaced with private equity executive Ron Marshall. A few other executives also were replaced.
Earlier this month, the jobs of six vice presidents and 10 department directors were eliminated. Several people were promoted from within to take over those duties.
Last summer, Borders - the nation's second largest bricks-and-mortar bookseller behind rival Barnes & Noble - laid off 275 employees, including 156 locally, as part of a previously announced plan to trim $120 million in expenses.
"While reducing payroll is never easy and we respect the impact it has on employees and their families, it is one of the necessary steps we must take along with other non-payroll expense reductions to help get this company back on track financially,'' Marshall said in a written statement.
Thursday's job cuts represent 12 percent of Borders' corporate employment base and affected departments ranging from marketing to human resources to sales. Workers whose jobs were eliminated are being offered transition pay, severance and job placement assistance, the company said in a statement.
"It seems like they are trying to avoid bankruptcy and trying to avoid taking the company private,'' said Ken Ahern, an assistant business professor at the University of Michigan's Stephen M. Ross School of Business. "It's not unusual to do all these kinds of changes if things aren't going well.''
On Thursday, Borders' stock (NYSE:BGP) closed up 3 cents to 54 cents a share.
Contact Stefanie Murray at smurray@annarbornews.com or 734-994-6932.
Borders lays off 136 more Latest job cuts follow 2 years of losses topping $150 million
The Ann Arbor News
Beleaguered Borders Group Inc. marked another painful milestone in its quest to downsize and cut costs Thursday when it laid off 136 people, including 94 in Ann Arbor.
The changes mean total employment has dwindled at the bookseller's Ann Arbor headquarters on Varsity Drive from 1,300 several years ago to 770 today.
The latest job cuts follow two months of upheaval in the corporate ranks at Borders, which has been struggling to restructure and return to profitability after two straight years of losses topping $150 million. Financial results for 2008 will be released at the end of March.
In January, former chief executive George Jones was ousted and replaced with private equity executive Ron Marshall. A few other executives also were replaced.
Earlier this month, the jobs of six vice presidents and 10 department directors were eliminated. Several people were promoted from within to take over those duties.
Last summer, Borders - the nation's second largest bricks-and-mortar bookseller behind rival Barnes & Noble - laid off 275 employees, including 156 locally, as part of a previously announced plan to trim $120 million in expenses.
"While reducing payroll is never easy and we respect the impact it has on employees and their families, it is one of the necessary steps we must take along with other non-payroll expense reductions to help get this company back on track financially,'' Marshall said in a written statement.
Thursday's job cuts represent 12 percent of Borders' corporate employment base and affected departments ranging from marketing to human resources to sales. Workers whose jobs were eliminated are being offered transition pay, severance and job placement assistance, the company said in a statement.
"It seems like they are trying to avoid bankruptcy and trying to avoid taking the company private,'' said Ken Ahern, an assistant business professor at the University of Michigan's Stephen M. Ross School of Business. "It's not unusual to do all these kinds of changes if things aren't going well.''
On Thursday, Borders' stock (NYSE:BGP) closed up 3 cents to 54 cents a share.
Contact Stefanie Murray at smurray@annarbornews.com or 734-994-6932.
Sunday, January 11, 2009
2008 Job Losses: Bad News, But Hardly 1945
www.jobberz.com
2008 Job Losses: Bad News, But Hardly 1945
Comparing last year's job losses to those of more than 60 years ago isn't quite fair. That said, there's still room for things to get worse
By Peter Coy
The U.S. is in the grip of a bad recession, but let's not scare ourselves silly by making things seem worse than they really are. Headlines blared "worst since 1945" on Jan. 9 after the Bureau of Labor Statistics announced the U.S. economy lost 524,000 jobs in December and 2.6 million for 2008 as a whole. Fact is, it's ridiculous to compare job losses in 2008 to ones more than 60 years earlier, when the U.S. population and economy were much smaller.
In percentage terms, the U.S. lost 1.9% of its payroll employment in 2008, according to data released Jan. 9. That's bad, all right. But it was only the fifth-worst on the list behind 1945 (6.6%), 1949 (3.4%), 1982 (2.3%), and 1944 (2.1%). That's according to calculations by Harm Bandholz, an economist at UniCredit Group in New York. Bandholz, by the way, was one of the people who highlighted the "worst since 1945" in his research report headline.
In a note before the government report came out, financial blogger Barry Ritholtz warned against the temptation to exaggerate the significance of the December job loss. Ritholtz is bearish on the economy and said, "I do not expect to see any sort of jobs recovery until deep into 2010 at the earliest." But he said monthly numbers don't reveal too much because they fluctuate. Noted Ritholtz: "A 500k job loss is still less than a third of a percent of the labor force."
If you want to make long-term historical comparisons of recessions, a better measure to use is the unemployment rate. The Labor Dept. says it reached 7.2% in December, up from 6.7% in November. That's bad. But it's still not as bad as in the early 1990s, when it hit 7.6%, let alone the early 1980s, when it topped out at 10.8%.
How Bad, How Fast?
Is it good news that things aren't quite as awful as the headlines say? Not exactly. It could just mean that, as bad as things seem now, the economy has room to get even worse. In fact, the U.S. economy almost certainly will lose more jobs this year. The only thing economists disagree on is whether the economy will get worse at a faster or a slower pace in the months ahead.
Certainly December was a gloomy month. The only sectors that posted gains were education and health care, and government. The economy suffered big losses in retail, manufacturing, construction, temporary help, and finance, among other sectors. Swiss Re's Chief U.S. Economist Kurt Karl wrote on Jan. 9 that one key indicator says the current recession will be at least as bad as the one at the beginning of the 1980s. Capital Economics Senior Economist Paul Ashworth said on Jan. 9 he expects the U.S. unemployment rate to peak at 9.5%—and not reach that level until the second half of 2010, nearly three years after the recession began.
On the relatively optimistic side of the economic outlook, Ellen Zentner, senior U.S. economist at Bank of Tokyo-Mitsubishi UFJ, said before the report that December 2008 might end up being the worst month of the recession in terms of job losses. Zentner was the most accurate forecaster of November payroll losses in Bloomberg's monthly survey. She underestimated the loss, which turned out to be 533,000 jobs, but others were even further off. (The November job loss was revised upward on Jan. 9 to 584,000.)
Zentner thinks things will start looking up in the new year. "The buzz is that December's numbers are abysmal, shocking even. But the general hope, or the feeling really, is that December could be the worst of those dismal numbers," she says. "The losses will not be as great going forward."
Employers Front-Loading Job Cuts
Jessica Hoverson of MF Global (MF) in Chicago is gloomier than Zentner about the 2009 outlook. Before the report, Hoverson, who is a fixed-income and foreign-exchange futures analyst, said: "We see the next couple of months as exceptionally poor. I wouldn't be surprised if we moved into down 700,000 or 800,000 jobs [per month] in this environment."
Tig Gilliam, CEO of the North American group of temporary-help giant Adecco, says job losses in December and January are being amplified by employers who want to cut a lot now so they won't have to dribble out smaller cuts in the months to come. Says Gilliam: "I've had more and more conversations where companies are saying it's clear now that this economic turnaround isn't coming quickly. They're saying we've got to get in front of this."
Coy is BusinessWeek's Economics editor.
2008 Job Losses: Bad News, But Hardly 1945
Comparing last year's job losses to those of more than 60 years ago isn't quite fair. That said, there's still room for things to get worse
By Peter Coy
The U.S. is in the grip of a bad recession, but let's not scare ourselves silly by making things seem worse than they really are. Headlines blared "worst since 1945" on Jan. 9 after the Bureau of Labor Statistics announced the U.S. economy lost 524,000 jobs in December and 2.6 million for 2008 as a whole. Fact is, it's ridiculous to compare job losses in 2008 to ones more than 60 years earlier, when the U.S. population and economy were much smaller.
In percentage terms, the U.S. lost 1.9% of its payroll employment in 2008, according to data released Jan. 9. That's bad, all right. But it was only the fifth-worst on the list behind 1945 (6.6%), 1949 (3.4%), 1982 (2.3%), and 1944 (2.1%). That's according to calculations by Harm Bandholz, an economist at UniCredit Group in New York. Bandholz, by the way, was one of the people who highlighted the "worst since 1945" in his research report headline.
In a note before the government report came out, financial blogger Barry Ritholtz warned against the temptation to exaggerate the significance of the December job loss. Ritholtz is bearish on the economy and said, "I do not expect to see any sort of jobs recovery until deep into 2010 at the earliest." But he said monthly numbers don't reveal too much because they fluctuate. Noted Ritholtz: "A 500k job loss is still less than a third of a percent of the labor force."
If you want to make long-term historical comparisons of recessions, a better measure to use is the unemployment rate. The Labor Dept. says it reached 7.2% in December, up from 6.7% in November. That's bad. But it's still not as bad as in the early 1990s, when it hit 7.6%, let alone the early 1980s, when it topped out at 10.8%.
How Bad, How Fast?
Is it good news that things aren't quite as awful as the headlines say? Not exactly. It could just mean that, as bad as things seem now, the economy has room to get even worse. In fact, the U.S. economy almost certainly will lose more jobs this year. The only thing economists disagree on is whether the economy will get worse at a faster or a slower pace in the months ahead.
Certainly December was a gloomy month. The only sectors that posted gains were education and health care, and government. The economy suffered big losses in retail, manufacturing, construction, temporary help, and finance, among other sectors. Swiss Re's Chief U.S. Economist Kurt Karl wrote on Jan. 9 that one key indicator says the current recession will be at least as bad as the one at the beginning of the 1980s. Capital Economics Senior Economist Paul Ashworth said on Jan. 9 he expects the U.S. unemployment rate to peak at 9.5%—and not reach that level until the second half of 2010, nearly three years after the recession began.
On the relatively optimistic side of the economic outlook, Ellen Zentner, senior U.S. economist at Bank of Tokyo-Mitsubishi UFJ, said before the report that December 2008 might end up being the worst month of the recession in terms of job losses. Zentner was the most accurate forecaster of November payroll losses in Bloomberg's monthly survey. She underestimated the loss, which turned out to be 533,000 jobs, but others were even further off. (The November job loss was revised upward on Jan. 9 to 584,000.)
Zentner thinks things will start looking up in the new year. "The buzz is that December's numbers are abysmal, shocking even. But the general hope, or the feeling really, is that December could be the worst of those dismal numbers," she says. "The losses will not be as great going forward."
Employers Front-Loading Job Cuts
Jessica Hoverson of MF Global (MF) in Chicago is gloomier than Zentner about the 2009 outlook. Before the report, Hoverson, who is a fixed-income and foreign-exchange futures analyst, said: "We see the next couple of months as exceptionally poor. I wouldn't be surprised if we moved into down 700,000 or 800,000 jobs [per month] in this environment."
Tig Gilliam, CEO of the North American group of temporary-help giant Adecco, says job losses in December and January are being amplified by employers who want to cut a lot now so they won't have to dribble out smaller cuts in the months to come. Says Gilliam: "I've had more and more conversations where companies are saying it's clear now that this economic turnaround isn't coming quickly. They're saying we've got to get in front of this."
Coy is BusinessWeek's Economics editor.
U.S. Job Losses in Dec. Could Be Worst in 60 Years
www.jobberz.com
WASHINGTON — U.S. job losses in December could be the worst in almost 60 years as companies scramble to cut costs even deeper to survive the country's economic and financial storms.
A barometer on layoffs is expected to show Thursday that the number of newly laid off people signing up for state unemployment insurance last week rose to 540,000, up from 492,000 in the previous week, according to economists' projections.
Just days into the new year, managed care provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International were among those announcing layoffs to cope with a recession that has just entered its second year. The flurry of job cuts suggest the employment picture will remain grim this year.
U.S. private employers shed close to 700,000 jobs in December, far more than economists had estimated, a report by ADP Employer Services said on Wednesday, suggesting a more comprehensive government report on Friday will be dismal as well.
"This is shockingly awful," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York told Reuters.
"If the recent relationship between the ADP numbers — after their recent revisions — and the official payroll data holds, then we should expect a number of about minus-700,000 on Friday, the biggest drop in 59 years."
The number of people continuing to draw jobless benefits is projected to stay near 4.5 million, demonstrating the troubles the unemployed are having in finding new jobs.
Electronic unemployment filing systems have crashed in at least three states in recent days due to the crush of newly jobless Americans seeking benefits.
"Businesses were panicked at the end of the year and those that had been holding off on layoffs are now capitulating," said Mark Zandi, chief economist at Moody's Economy.com.
With jobs disappearing, shoppers held tight to their wallets and pocketbooks last month.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, predicts retail sales out Thursday will show a drop for December and the worst holiday shopping season since at least 1969.
For all of 2008, employers likely slashed payrolls by at least 2.4 million. That's based on economists' forecasts for a net loss of 500,000 additional jobs in December, as well as the job losses already reported every month last year by the government. Some, however, think the number of jobs cut last month will be higher — around 600,000 or 700,000. The Labor Department will release that report Friday.
If the conservative, 2.4 million estimate of payroll reductions for 2008 proves correct, it would mark the first annual job loss since the previous recession in 2001. It also would be the worst year of job losses since 1945, when employers slashed nearly 2.8 million jobs. Though the number of jobs in the United States has more than tripled since then, job losses of that magnitude would be sober testimony to the nation's economic woes.
With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15-1/2 years. That figure also will be released Friday.
President-elect Barack Obama, who takes over Jan. 20, is proposing a mammoth $775 billion package of tax cuts and government spending over two years to revive the moribund economy. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.
Even with a big government stimulus, economists still believe the unemployment rate will keep climbing, hitting 8 or 10 percent by the end of this year. Obama's economic advisers estimate that a $850 billion recovery package would lower the jobless rate to about 7.4 percent and create 3.2 million jobs by the first quarter of 2011.
Vanishing jobs, tanking home values and shriveled investments have forced consumers to cut back sharply on their spending. In turn, businesses have retrenched as well.
Consumers and companies are folding under the negative forces of the collapsed housing market, a global credit crunch and the worst financial crisis since the 1930s. The recession, which started in December 2007, already is the longest in a quarter-century.
The expectation of more job losses ahead "will only perpetuate the vicious downward cycle propelling the economy," said Bernard Baumohl, chief global economic at the Economic Outlook Group.
The Associated Press and Reuters contributed to this report.
WASHINGTON — U.S. job losses in December could be the worst in almost 60 years as companies scramble to cut costs even deeper to survive the country's economic and financial storms.
A barometer on layoffs is expected to show Thursday that the number of newly laid off people signing up for state unemployment insurance last week rose to 540,000, up from 492,000 in the previous week, according to economists' projections.
Just days into the new year, managed care provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International were among those announcing layoffs to cope with a recession that has just entered its second year. The flurry of job cuts suggest the employment picture will remain grim this year.
U.S. private employers shed close to 700,000 jobs in December, far more than economists had estimated, a report by ADP Employer Services said on Wednesday, suggesting a more comprehensive government report on Friday will be dismal as well.
"This is shockingly awful," Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York told Reuters.
"If the recent relationship between the ADP numbers — after their recent revisions — and the official payroll data holds, then we should expect a number of about minus-700,000 on Friday, the biggest drop in 59 years."
The number of people continuing to draw jobless benefits is projected to stay near 4.5 million, demonstrating the troubles the unemployed are having in finding new jobs.
Electronic unemployment filing systems have crashed in at least three states in recent days due to the crush of newly jobless Americans seeking benefits.
"Businesses were panicked at the end of the year and those that had been holding off on layoffs are now capitulating," said Mark Zandi, chief economist at Moody's Economy.com.
With jobs disappearing, shoppers held tight to their wallets and pocketbooks last month.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, predicts retail sales out Thursday will show a drop for December and the worst holiday shopping season since at least 1969.
For all of 2008, employers likely slashed payrolls by at least 2.4 million. That's based on economists' forecasts for a net loss of 500,000 additional jobs in December, as well as the job losses already reported every month last year by the government. Some, however, think the number of jobs cut last month will be higher — around 600,000 or 700,000. The Labor Department will release that report Friday.
If the conservative, 2.4 million estimate of payroll reductions for 2008 proves correct, it would mark the first annual job loss since the previous recession in 2001. It also would be the worst year of job losses since 1945, when employers slashed nearly 2.8 million jobs. Though the number of jobs in the United States has more than tripled since then, job losses of that magnitude would be sober testimony to the nation's economic woes.
With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15-1/2 years. That figure also will be released Friday.
President-elect Barack Obama, who takes over Jan. 20, is proposing a mammoth $775 billion package of tax cuts and government spending over two years to revive the moribund economy. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.
Even with a big government stimulus, economists still believe the unemployment rate will keep climbing, hitting 8 or 10 percent by the end of this year. Obama's economic advisers estimate that a $850 billion recovery package would lower the jobless rate to about 7.4 percent and create 3.2 million jobs by the first quarter of 2011.
Vanishing jobs, tanking home values and shriveled investments have forced consumers to cut back sharply on their spending. In turn, businesses have retrenched as well.
Consumers and companies are folding under the negative forces of the collapsed housing market, a global credit crunch and the worst financial crisis since the 1930s. The recession, which started in December 2007, already is the longest in a quarter-century.
The expectation of more job losses ahead "will only perpetuate the vicious downward cycle propelling the economy," said Bernard Baumohl, chief global economic at the Economic Outlook Group.
The Associated Press and Reuters contributed to this report.
December's job losses push unemployment rate to 7.2 percent
www.jobberz.com
BY CARRIE MASON-DRAFFEN | carrie.mason-draffen@newsday.com; PATRICIA KITCHEN
January 10, 2009
The U.S. economy continued its employment free fall in December with a loss of 524,000 jobs, fewer than some market experts had predicted but staggering nonetheless.
The Bureau of Labor Statistics, which released the jobs data Friday, characterized the losses as "large" and "widespread" across the economy.
The unemployment rate rose to 7.2 percent last month, the highest in almost 16 years, according to Bloomberg News. That compares with 4.9 percent in December 2007, when the current recession officially began.
Manufacturing lost the most jobs in December - 149,000. The professional and business-service category, which includes temporary staffing companies, came in second, with 113,000 jobs lost. Health care continued to post the highest gains, adding 32,000 jobs.
All told for 2008, the economy racked up a 2.6-million job loss, the most since 1945, Bloomberg said.
"The latest numbers are more evidence that we are in big trouble and that we need a dramatic change in economic policy," said Gregory DeFreitas, professor of economics at Hofstra University in Hempstead and director of the school's labor studies program.
Indeed, in a news conference Friday, President-elect Barack Obama underscored the need for an economic stimulus plan.
"Clearly the situation is dire," he said. "It is deteriorating and it demands urgent and immediate action."
Revised numbers in the latest report show that the hemorrhaging was worse in November and October than the original data showed. October's loss was revised to 423,000 from 320,000. And November was revised to 584,000, from 533,000.
As bleak as the job numbers are for the general population, they are downright dire for teens and minorities. Teens have a 21 percent jobless rate. African-Americans, with 12 percent unemployment, have the highest rate among minorities. Hispanics had the second highest, 9.2 percent. By contrast, Asians have a 5.1 percent jobless rate.
The reasons for the higher unemployment rates for teens and minorities, which are historically higher, are myriad, jobs experts said.
DeFreitas attributes teens' higher jobless rate in part to a trickle-down effect in an anemic job market. "If adults can't get decent-paying jobs, it's that much harder for young people to get jobs," he said.
He also noted the federal government has been cutting back on programs that provide job training for non-college-bound young people. "These folks have been really hurting," he said.
For minorities he noted that discrimination and fewer college graduates among them play a role.
James Parrott, chief economist for the Fiscal Policy Institute, an Albany-based economic-policy think tank, noted that the discrimination in part explained why blacks disproportionately work in more volatile sectors of the economy.
"Blacks are concentrated in industries that are seasonal and cyclically volatile," he said, "and so they are the among the first to lose their jobs."
Job losses
423,000 October*
584,000 November*
524,000 December
http://www.newsday.com/services/newspaper/printedition/saturday/news/ny-bzjobs105993713jan10,0,7495063.story
BY CARRIE MASON-DRAFFEN | carrie.mason-draffen@newsday.com; PATRICIA KITCHEN
January 10, 2009
The U.S. economy continued its employment free fall in December with a loss of 524,000 jobs, fewer than some market experts had predicted but staggering nonetheless.
The Bureau of Labor Statistics, which released the jobs data Friday, characterized the losses as "large" and "widespread" across the economy.
The unemployment rate rose to 7.2 percent last month, the highest in almost 16 years, according to Bloomberg News. That compares with 4.9 percent in December 2007, when the current recession officially began.
Manufacturing lost the most jobs in December - 149,000. The professional and business-service category, which includes temporary staffing companies, came in second, with 113,000 jobs lost. Health care continued to post the highest gains, adding 32,000 jobs.
All told for 2008, the economy racked up a 2.6-million job loss, the most since 1945, Bloomberg said.
"The latest numbers are more evidence that we are in big trouble and that we need a dramatic change in economic policy," said Gregory DeFreitas, professor of economics at Hofstra University in Hempstead and director of the school's labor studies program.
Indeed, in a news conference Friday, President-elect Barack Obama underscored the need for an economic stimulus plan.
"Clearly the situation is dire," he said. "It is deteriorating and it demands urgent and immediate action."
Revised numbers in the latest report show that the hemorrhaging was worse in November and October than the original data showed. October's loss was revised to 423,000 from 320,000. And November was revised to 584,000, from 533,000.
As bleak as the job numbers are for the general population, they are downright dire for teens and minorities. Teens have a 21 percent jobless rate. African-Americans, with 12 percent unemployment, have the highest rate among minorities. Hispanics had the second highest, 9.2 percent. By contrast, Asians have a 5.1 percent jobless rate.
The reasons for the higher unemployment rates for teens and minorities, which are historically higher, are myriad, jobs experts said.
DeFreitas attributes teens' higher jobless rate in part to a trickle-down effect in an anemic job market. "If adults can't get decent-paying jobs, it's that much harder for young people to get jobs," he said.
He also noted the federal government has been cutting back on programs that provide job training for non-college-bound young people. "These folks have been really hurting," he said.
For minorities he noted that discrimination and fewer college graduates among them play a role.
James Parrott, chief economist for the Fiscal Policy Institute, an Albany-based economic-policy think tank, noted that the discrimination in part explained why blacks disproportionately work in more volatile sectors of the economy.
"Blacks are concentrated in industries that are seasonal and cyclically volatile," he said, "and so they are the among the first to lose their jobs."
Job losses
423,000 October*
584,000 November*
524,000 December
http://www.newsday.com/services/newspaper/printedition/saturday/news/ny-bzjobs105993713jan10,0,7495063.story
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