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Source:CNN

NEW YORK: Employers cut far fewer jobs from payrolls in July, according to a report from the government Friday, and the unemployment rate fell for the first time in more than a year.The Labor Department reported a net loss of 247,000 jobs in July, the fewest job losses since August 2008. Economists surveyed by Briefing.com had forecast a loss of 325,000.The unemployment rate fell to 9.4% from 9.5% in June, the first decline in that closely watched reading since April of 2008. Economists had expected unemployment to rise to 9.6%.

Source:CNN

NEW YORK: It looks like someone may have sprayed a healthy dose of Ortho Weed B Gon on those economic green shoots.So much for the notion of “less bad” numbers being good enough to get people excited about the economy. There was nothing “less bad” — let alone good — in the latest monthly employment report.The number of jobs lost in June was higher than in May and worse than expected. The unemployment rate inched up again, continuing its steady march toward 10%. And the length of the average workweek slipped to a record low while wages were flat. That means that for those who do have a job, they are working fewer hours and getting a smaller paycheck. “Let’s start with the good news. There is none,” said Stuart Hoffman, chief economist with PNC Financial Services in Pittsburgh.”There is no silver lining in this report. The economy is still in the grips of the recession.”The June jobs report is a reality check to those who thought that the recession had actually ended earlier this year as well as to investors that giddily bid up stocks in the past three months on the hopes of a quick, robust recovery.Not surprisingly, stocks plunged Thursday morning, with the major indexes all losing at least 2%.Talkback: How high will the unemployment rate go? Are you worried about your own job security? Leave your comments at the bottom of this story. Now don’t get me wrong. The weak job numbers for June are not necessarily a sign that the economy is on its way back to the truly scary levels of late last year and earlier this year. After all, the monthly job loss of 467,000 in June is still an improvement, if you will, over the average loss of 691,000 jobs a month in the first quarter of 2009.Along those lines, the jobs report for July will be an important indicator of whether the economy is really slipping or if the recovery is just unfolding at a slower pace.”I wouldn’t make much of the June report. If we have another decline of more than 400,000 jobs in July that would be a problem,” said John Canally, economist for LPL Financial, an independent broker-dealer based in Boston.Canally added that the one-tenth of a percentage point increase in the unemployment rate in June is an encouraging sign considering that the joblessness rate had been rising at an average of about four-tenths of a percentage point a month since the collapse of Lehman Brothers in September.Hoffman conceded that there may be some unique factors that made the June jobs report worse than it might otherwise have been, most notably the shutdowns of General Motors (GMGMQ) and Chrysler plants due to their bankruptcies.But he added that until employers are comfortable enough to start looking for new workers, there’s little consolation in the fact that the unemployment rate is rising more gradually than before.”You could make the case that number of layoffs are declining but there is still no hiring. I don’t draw much comfort from a small uptick in unemployment,” Hoffman said. Some economists also fear that the monthly loss of “only” 322,000 jobs in May may have been an anomaly and that there could be more months similar to June ahead before the job market truly gets better.”The jobs number in May was the aberration,” said Martin Regalia, chief economist with the U.S. Chamber of Commerce. “We’re pulling out of the steepest part of the decline but still declining at this point. Everybody got a little overexuberant with the May jobs numbers.”0:00
/5:20Is stimulus helping jobs?Regalia said he expects job losses to persist until the first quarter of 2010 before the labor market begins to stabilize. He added that the unemployment rate, which hit 9.5% in June, will probably peak between 10% and 10.5%. That’s clearly not good news. Even though the unemployment rate has tended to keep rising even after past recessions have technically ended, it’s hard to envision a full-blown economic rebound as long as consumers are scared about their job security and cutting back on spending.”We’re not catapulting into the abyss anymore. But the fact that wage growth was zero, combined with falling hours of work, will constrain any consumer spending growth. This puts families in a bind,” said Lawrence Mishel, president of the Economic Policy Institute, an independent think tank based in Washington.Consumer spending is still the biggest component of the nation’s economy. So it’s silly, not to mention dangerous, to believe that the economy is going to come roaring back to life later this year if we’re in for another jobless recovery.”The economy may finally stop shrinking sometime later this year, but we could still be losing jobs for many months,” Mishel said. “To say employment is a lagging indicator is dismissive of the economic impact on real people.” Anyway, I hope that everyone enjoys a great, safe 4th of July weekend. It’s now time for an early summer break. The Buzz will be back on July 15.Talkback: How high will the unemployment rate go? Are you worried about your own job security?
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NEW YORK: The pace of U.S. job losses has significantly slowed, according to a report released Wednesday.Outplacement firm Challenger, Gray & Christmas Inc. reported that the number of job cuts announced in June fell for the fifth straight month, after reaching a seven-year high in January. Challenger said job cut announcements by U.S. employers totaled 74,393 in June, a 33% decline from May. It was the lowest total since March 2008 and 9% lower than the number of job cuts announced in the same month a year ago, according to Challenger. “This recent drop-off may be indicative of an overall downward trend in layoff activity,” said John Challenger, chief executive officer of Challenger, Gray & Christmas said in a statement.However, states struggling with severe deficits are still laying off a substantial number of workers, according to the report. The government/non-profit sector was hit the hardest for the fourth month in a row, with 19,438 announced job cuts in June. The automotive sector had the second highest tally of planned cuts, followed by the transportation industry.”The government and non-profit sector will continue to be a source of heavy job cutting for the remainder of the year. States and local municipalities are running significant budget deficits and have no option but to keep making cutbacks in services and personnel. Even after an injection of federal stimulus money, many states will still be in the red,” Challenger said.”Meanwhile, job cuts in financial services, industrial-goods manufacturing, computer and consumer products have slowed considerably and may continue to do so with the economy stabilized. It could be several more months before we see hiring make a comeback, but it appears that many employers have reached the staffing levels they need to make it through the recession,” he added.The financial services industry, which was the hardest hit in 2008, announced a mere 2,085 job cuts in June. Altogether, employers have announced nearly 900,000 job cuts so far this year — the largest total since Challenger began tracking the figures in 1989. The government’s monthly jobs report is due Friday. The Labor Department report is expected to show that the economy shed 370,000 jobs in June, slightly more than the 345,000 reported for May, according to a consensus estimate of economists compiled by Briefing.com. The unemployment rate is predicted to rise to 9.6% from 9.4%

Source:CNN

NEW YORK: The May jobs report, which showed the lowest level of cuts since September, sent stocks slightly higher Friday on more hopes that the economy may soon be on the upswing.It’s encouraging though that investors didn’t treat the news as a reason for yet another euphoric rally. This jobs report was not an excuse for that. Hip hip hooray for the diminishing rate of decline?Yes, it is starting to look like the worst is over. And if that’s true it is great news. But don’t mistake what might be the initial sprouting of those proverbial economic green shoots for some genetically engineered frankenfood. Let’s put things in perspective. Employers still cut 345,000 jobs last month. In case that didn’t sink in, I’ll repeat it. Employers still cut 345,000 jobs last month. That’s a big number. But in some of the media’s coverage of the jobs report, journalists had the unmitigated gall to say that only 345,000 jobs were lost. Only? It is downright insulting to the average American to use such a modifier. Yes, the job market is a lagging indicator. That means it may be the last part of the economy to recover.Talkback: Can the economy really recover while people are still losing jobs? Leave your comments at the bottom of this story. But with unemployment now at a 26-year high, it’s hard to imagine how there can be a robust rebound until companies actually feel comfortable to start hiring again. Still, some analysts have declared in reports I’ve read this morning that the jobs report is proof that we’ve reached an end to the recession. Really? That’s premature. All that the May jobs report confirms is what we’ve known since March, that the economy is not in as bad shape is it was a few months ago and is not going to get as bad as the overly pessimistic Depression II scaremongers thought it would get. That doesn’t mean the economy is now clicking again. “There are reasons for some optimism. But we’re still going down,” said Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida in Orlando. “It just feels like an economic parachute has been deployed and we’re falling at a slower pace. That’s good news but it’s not justification to declare the recession’s over.” Q,R,S,T…Many economists like to use letters of the alphabet to describe what the economy does coming out of a recession. Along those lines, the big debate now seems to be whether this will be a V-shaped recovery — i.e. the bounceback is as sharp as the decline was — or a U-shaped recovery, meaning that the economy bounces on the bottom for a while before heading back up.But neither of those letters seem apt. Scott Armiger, a portfolio manager with Christiana Bank & Trust, in Greenville, Del., said he’d use the twenty-third letter of the alphabet instead of the tweny-first or twenty-second to describe the recovery.”I’m confident the economy will recover. But it will be W-shaped with lots of fits and starts,” he said.0:00
/03:01Markets ignore GM bankruptcySnaith also thinks that people are fooling themselves if they think that the economy will bounce back quickly. Instead of using a letter to describe the economy, he said a recovery will look more like a gravy boat. By that he means that the climb back up will not be steep, but long and slanted like a gravy boat’s spout. “The recovery is not going to be as sharp as the decline was,” Snaith said. So why are investors suddenly so willing to declare the glass is half-full instead of half-empty? Less bad doesn’t necessarily equal goodBarry Ritholtz, CEO and director of equity research at Fusion IQ, said he thinks Wall Street’s recent enthusiasm is more due to the fact that people are no longer pricing in another Depression as opposed to legitimate belief that the recession is over. “We’ve gone from thinking it’s a 100-year flood to this now being a regular run of the mill recession,” he said. “The economy still stinks but it’s better than the past two quarters.” Armiger adds that he thinks 2009 is a year of economic healing and that a true recovery won’t begin until the middle of next year. So he’s not buying into the broad market rally just yet.”The market has come too far too fast from the March lows. We’ve had almost three to four years worth of normal returns in three months,” he said.Instead, Armiger said it’s still time to look at more defensive stocks, such as consumer staples firms. As long as people are still losing jobs — even if the pace of the losses is slowing — Armiger said consumers are going to focus more on buying what they need and not necessarily what they want. For that reason, he said some of his top holdings are in more stodgy consumer companies such as Wal-Mart Stores (WMT, Fortune 500), PepsiCo (PEP, Fortune 500), Procter & Gamble (PG, Fortune 500) and Colgate-Palmolive (CL, Fortune 500).Now this may seem overly gloomy. But it’s not a case of being pessimistic as opposed to optimistic. It’s just realistic. The economy does appear to be getting better, but a lot of that could be due to massive amounts of liquidity injected into it during the past year or so. Government assistance can’t go on forever. And stimulus creates its own risks, namely inflation.”If the government wasn’t propping things up, the numbers would be much worse. The economy is still very fragile,” Ritholtz said.Add all that up and it means that hopes for a massive recovery appear misguided. “The labor market will be ugly scar to remind us of what we’ve been through and it will take years to fade away,” Snaith said. “Companies are going to be cautious coming out of this and won’t be in a rush to hire.” Talkback: Can the economy really recover while people are still losing jobs?
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NEW YORK: The last thing the battered U.S. labor market needs are the current problems at GM and Chrysler.There have been some signs that the job market might be slowly improving. The number of people filing for new jobless benefits has declined for three straight weeks, and both payroll processing firm ADP and outplacement firm Challenger Gray & Christmas reported a reduction in job losses in May.The government will release the official labor figures for May on Friday and economists surveyed by Briefing.com forecast that employers cut another 520,000 jobs. While that would be the sixth straight month that losses topped 500,000 jobs, it’s much lower than the 741,000 jobs lost in January. And even though the unemployment rate is expected to hit a 26-year high of 9.2%, many economists are hopeful that January’s job losses were the peak. 0:00
/3:27Car woes boost job lossesBut the bankruptcies at General Motors (GMGMQ) and Chrysler LLC could put a job recovery in neutral.”It’s another headwind that the labor market doesn’t need right now,” said David Wyss, chief economist for Standard & Poor’s.The Center for Automotive Research estimates that even if the GM and Chrysler bankruptcy processes go as smoothly as possible, there will be 63,000 permanent job losses this year related to the bankruptcies, followed by another 179,000 next year. And if GM and Chrysler have trouble emerging from the bankruptcy process, 1.3 million more jobs could be lost this year and an additional 446,000 in 2010, according to the study.Debra Maranger Menk, one of the authors of the study, said that while things are going well at Chrysler, it is too soon to assume the bankruptcy process will go as planned at GM. Problems at GM create most of the job losses envisioned in her group’s worst case scenario, which includes a prolonged stay in bankruptcy for the company, followed by widespread bankruptcies of GM suppliers and dealerships.”We were extremely worried that we might have the worst case scenario before the filings; now we’re just very worried,” Menk said. “I don’t think we’re taking an easy breath yet.”The estimates from the Center for Automotive Research also include only permanent job losses, not the temporary job cuts caused by Chrysler and GM essentially shutting down most of their assembly lines last month, and cutbacks at suppliers due to those temporary shutdowns.The study also doesn’t include cutbacks at suppliers resulting from those temporary shutdowns, or the slashing of production at rivals such as Ford Motor (F, Fortune 500) and Toyota Motor (TM) due to slumping sales. Millions of jobs still tied to DetroitThe auto industry doesn’t employ as many people as it did during the Big Three’s heyday. But even after years of plant closings and downsizing, the industry is still a major source of U.S. jobs. There are 677,000 people working in auto plants and auto parts plants in the United States, according to the government’s April reading. Another 1.1 million work in auto dealerships.While the 1.7 million working directly for the industry is down 23% in just the last two years, it’s still more than employed by many “healthier” industries, such as software development, computers and semiconductor manufacturing or legal services.In addition, many other industries also depend heavily on the auto business. Tech companies manufacture semiconductors used in car engines, for example. Truckers move parts and finished cars while carpeting companies make interiors for vehicles.Many of those those indirect suppliers will probably not get paid due to the bankruptcy filings, which in turn could result in cutbacks in employment beyond auto plants, according to experts.One of the biggest concerns is that the job losses in the auto industry could be more permanent than some of the other cyclical job losses in industries such as construction or even banking and finance. Efforts by GM and Chrysler to drastically cut their capacity and decisions by Toyota and other automakers to pull back on their U.S. expansion plans point to a smaller industry here in the future, even when sales return.”Once the dust settles, the industry is going to look a lot different,” said Gary Janas, vice president of job placement firm Adecco Group North America. “Even when the jobs come back, they’re not going to come back to what they were.”

Source:CNN

NEW YORK: Massive investment in renewable energy could ultimately create 4 million manufacturing jobs. But for the workers in the bottom rung of this movement, the shift to green jobs could very well mean a pay cut of nearly 60%, a trend spreading across the entire manufacturing sector. Americans are betting that molding steel wind turbines, slicing silicon for solar panels and making batteries for electric cars will put them back on top of the manufacturing game. But some of these jobs pay far less than what a union worker might be used to.Many of the entry-level jobs making green energy components start at 12 an hour, much less than the now extinct 28 an hour job that had allowed high school-educated workers in the auto sector to achieve middle class status last century.”Particularly at the lower end, these are not very good jobs,” said Philip Mattera, research director at Good Jobs First, a labor-friendly research group, also acknowledging that the renewable energy sector paid wages that were “all over the map.”The number of jobs that the renewable energy industry industry could generate is potentially huge. The 4 million new jobs, calculated by the University of California, Berkley, would bring back more than half of all the manufacturing jobs lost in this country since the sector’s heyday in the late ’70s.At a battery plant just outside Indiana job growth could boom. The plant is owned by EnerDel, the car battery division of Ener1. Here, the company is racing to build a cost competitive battery for an all-electric car. If it gets a government loan it’s applying for, the company plans on hiring up to 3,000 people. That’s roughly what a big auto plant employs.But 12 an hour is the starting wage for a production worker. While the starting wages at EnerDel are lower than what the auto industry pays, company executives stressed salaries go up quickly as skill sets improve. They also stressed a company like EnerDel employs lots of skilled workers too, from the electrical engineers needed to design the batteries to the mechanical engineers who build the machines.A level pay scale. The diversity of jobs in the renewable energy business is one thing supporters of green manufacturing tout. They say people should look beyond the starting wages for labor when judging the industry.”I cannot think of an industry that has more diversity in wages,” said Jackie Roberts, director of sustainable technology at the Environmental Defense Fund.Plus, 12 an hour is in-line than the average wage for an electronics assembler in the Indianapolis area, according to the Labor Department.It’s a similar scene at a plant making silicon for solar panels up in Michigan. Just outside of Saginaw, an executive at Hemlock Semiconductor would only say the company paid “competitive wages.”But people in town said the non-union Hemlock plant paid around 10 an hour for unskilled production workers and 20 an hour for skilled ones.Mike Hanley, president of the local United Auto Workers union, said he hoped green manufacturing will become more unionized going forward. But he agreed that the wages at Hemlock were pretty good for the area. Not just green industry. Environmental Defense’s Roberts notes that besides new companies making things specifically for the renewable energy business, as is the case with EnerDel, there are also lots of manufacturing firms that make components for both the green and traditional industries.”There are manufacturing jobs,” she said. “They have the same wages as anyone making components for any other industry.”That’s the case in Minster, Ohio, where the Minster Machine Company turns out both parts for wind turbines as well as machines for other the auto and food processing industries.0:00
/2:25Building windmills in Rust BeltInside the company’s massive iron foundry, workers start at 17.50 and hour whether they are pouring castings for a wind turbine hub or an auto stamping machine.But the company’s president, John Winch, noted that in the long run, wages in the U.S. will probably come down as wages in the developing world come up – all part of the globalization process.”The wage scale will probably be more dependent on what the world’s wage scale is,” said Winch.Even in the auto industry, 28-an-hour is no longer the starting wage. Since 2007 the industry has had a two-tier wage system, meaning that when they start hiring again the new starting wage will be 14 an hour.

Source:CNN