Jobless Rate Jumps to 7.2 Percent in December
15 years 3 months ago #1
by karen
Jobless Rate Jumps to 7.2 Percent in December was created by karen
The fine print of yesterday's report from the Labor Department showed that a broader measure of joblessness -- which includes people who are working part-time but would prefer a full-time job and people who want work but have given up looking -- rose by nearly a full percentage point, to 13.5 percent.
The overall unemployment rate jumped from 6.8 percent in November, the Labor Department said. Employers cut 524,000 jobs last month, 2.6 million over the course of 2008. Companies not only slashed workers, but also cut back on hours for their remaining employees, to the shortest average workweek on record.
"The numbers are pretty rotten," said David Wyss, chief economist at Standard & Poor's, "and as you look at the details of this, it's hard to find any bright spots."
The weak results were roughly in line with expectations, one reason that the stock market was down only modestly on the news. The Dow Jones industrial average fell 1.6 percent, or 143 points. Some analysts said they have become almost numb to horrible economic news.
"When you have an economy in free-fall, you have to expect job losses of this magnitude," said Richard Yamarone, chief economist at Argus Research.
Job losses have become perhaps the most visible sign of the current stress on the economy, partly because jobs have disappeared at an accelerating pace in recent months. As President-elect Barack Obama urges approval of a massive program of tax cuts and government spending, he has pointed to the growing ranks of unemployed as one of the most pressing reasons to act quickly, arguing that his plan will save or create 3 million jobs.
ad_icon
clear pixel
"Today's job report only underscores the need for us to move with a sense of urgency and common purpose," Obama said yesterday. "There is a devastating economic crisis that will become more and more difficult to contain with time."
All signs are that the labor market will continue weakening in 2009. Boeing, for example, said yesterday that it would cut 4,500 jobs from its commercial-airplanes division this year. A separate report yesterday showed that businesses' inventories are still rising, suggesting that they still need to cut back further on their operations. Many economists think the jobless rate could top 9 percent, or even hit double digits, by the end of the year.
More so than in past recessions, employers are finding ways to tighten their payrolls beyond laying off staff. They have long been on a "hiring strike," leaving empty jobs vacant. Now they are also cutting hours. Combined with hourly wages that have been essentially flat, that helps explain why consumer spending has fallen sharply and retailers are ailing.
"Even though a part-time job counts the same as a full-time job in the headline numbers, to a person who is working part time because that's all they can get, it's not the same quality of employment," said Michael J. Feroli, an economist at J.P. Morgan Chase. "We still have significant adjustment to go, and conditions probably aren't going to get noticeably better in the next few months."
Job losses are rising rapidly even among groups that normally are insulated from recessions. Among people with a college degree, the unemployment rate spiked to 3.7 percent from 3.2 percent.
In a sign of the breadth of the strain on the economy, joblessness rose sharply among workers of every race and gender. Unemployment among whites rose to 6.6 percent from 6.2 percent. Among blacks, it rose to 11.9 percent from 11.3 percent. Latino unemployment rose to 9.2 percent from 8.6 percent. Unemployment among men shot up to 7.9 percent from 7.4 percent, and among women to 5.9 percent to 5.6 percent.
Almost all sectors cut back on jobs. The steepest losses were in manufacturing, construction, temp services and retail. Health care and government were the only major sectors that created jobs.
Some of those losses in retail and temp services may come back in the coming months. The Labor Department adjusts the data to try to smooth out ordinary seasonal variations. Because retailers did not hire many seasonal workers or temps this year, they are likely to cut fewer jobs in January and February. That should provide some support to job growth in the immediate future, economists said.
The overall unemployment rate jumped from 6.8 percent in November, the Labor Department said. Employers cut 524,000 jobs last month, 2.6 million over the course of 2008. Companies not only slashed workers, but also cut back on hours for their remaining employees, to the shortest average workweek on record.
"The numbers are pretty rotten," said David Wyss, chief economist at Standard & Poor's, "and as you look at the details of this, it's hard to find any bright spots."
The weak results were roughly in line with expectations, one reason that the stock market was down only modestly on the news. The Dow Jones industrial average fell 1.6 percent, or 143 points. Some analysts said they have become almost numb to horrible economic news.
"When you have an economy in free-fall, you have to expect job losses of this magnitude," said Richard Yamarone, chief economist at Argus Research.
Job losses have become perhaps the most visible sign of the current stress on the economy, partly because jobs have disappeared at an accelerating pace in recent months. As President-elect Barack Obama urges approval of a massive program of tax cuts and government spending, he has pointed to the growing ranks of unemployed as one of the most pressing reasons to act quickly, arguing that his plan will save or create 3 million jobs.
ad_icon
clear pixel
"Today's job report only underscores the need for us to move with a sense of urgency and common purpose," Obama said yesterday. "There is a devastating economic crisis that will become more and more difficult to contain with time."
All signs are that the labor market will continue weakening in 2009. Boeing, for example, said yesterday that it would cut 4,500 jobs from its commercial-airplanes division this year. A separate report yesterday showed that businesses' inventories are still rising, suggesting that they still need to cut back further on their operations. Many economists think the jobless rate could top 9 percent, or even hit double digits, by the end of the year.
More so than in past recessions, employers are finding ways to tighten their payrolls beyond laying off staff. They have long been on a "hiring strike," leaving empty jobs vacant. Now they are also cutting hours. Combined with hourly wages that have been essentially flat, that helps explain why consumer spending has fallen sharply and retailers are ailing.
"Even though a part-time job counts the same as a full-time job in the headline numbers, to a person who is working part time because that's all they can get, it's not the same quality of employment," said Michael J. Feroli, an economist at J.P. Morgan Chase. "We still have significant adjustment to go, and conditions probably aren't going to get noticeably better in the next few months."
Job losses are rising rapidly even among groups that normally are insulated from recessions. Among people with a college degree, the unemployment rate spiked to 3.7 percent from 3.2 percent.
In a sign of the breadth of the strain on the economy, joblessness rose sharply among workers of every race and gender. Unemployment among whites rose to 6.6 percent from 6.2 percent. Among blacks, it rose to 11.9 percent from 11.3 percent. Latino unemployment rose to 9.2 percent from 8.6 percent. Unemployment among men shot up to 7.9 percent from 7.4 percent, and among women to 5.9 percent to 5.6 percent.
Almost all sectors cut back on jobs. The steepest losses were in manufacturing, construction, temp services and retail. Health care and government were the only major sectors that created jobs.
Some of those losses in retail and temp services may come back in the coming months. The Labor Department adjusts the data to try to smooth out ordinary seasonal variations. Because retailers did not hire many seasonal workers or temps this year, they are likely to cut fewer jobs in January and February. That should provide some support to job growth in the immediate future, economists said.
Please Log in or Create an account to join the conversation.
15 years 3 months ago #2
by phase1
Replied by phase1 on topic Americans receiving jobless benefits hits record
WASHINGTON – The number of people receiving unemployment benefits has reached an all-time record, the government said Thursday, and more layoffs are spreading throughout the economy.
The Labor Department reported that the number of Americans continuing to claim unemployment insurance for the week ending Jan. 17 was a seasonally adjusted 4.78 million, the highest on records dating back to 1967. That's an increase of 159,000 from the previous week and worse than economists' expectations of 4.65 million.
As a proportion of the work force, the tally of unemployment benefit recipients is the highest since August 1983, a department analyst said.
The total released by the department doesn't include about 1.7 million people receiving benefits under an extended unemployment compensation program authorized by Congress last summer. That means the total number of recipients is actually closer to 6.5 million people.
Businesses continued to hemorrhage jobs Thursday. Ford Motor Co. reported a fourth-quarter loss of $5.9 billion and said its credit arm would cut 20 percent of its work force, or 1,200 jobs. Eastman Kodak Co. said it's cutting 3,500 to 4,500 jobs, or 14 to 18 percent of its work force, as it posted a $137 million quarterly loss on plunging sales of photography products.
In another sign of the deepening recession, the Commerce Department said Thursday that new orders for durable goods dropped by 2.6 percent last month, even worse than the 2 percent decline economists expected. Orders fell 5.7 percent for the year, the second biggest drop on government records, exceeded only by a 10.7 percent plunge in 2001.
The financial markets fell on the news. The Dow Jones industrial average dropped about 110 points in morning trading.
The tally of Americans filing new jobless benefit claims rose slightly to a seasonally adjusted 588,000 last week, from a downwardly revised figure of 585,000 the previous week. That also was worse than analysts' forecast of 575,000 new claims.
The number of initial claims is close to the 26-year high of 589,000 reached in late December, though the work force has grown by about half since then.
The record number of ongoing benefit claims is an indication that laid-off workers are having a difficult time finding new jobs, economists said.
"This highlights the key point that the trend in gross hirings has slowed as abruptly as the trend in gross firings ... has risen," Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note.
A year ago, continuing claims stood at about 2.7 million, less than half their current level when the extended unemployment program is included.
Abiel Reinhart, an economic analyst at JPMorgan Chase, said the report indicates the unemployment rate likely rose this month. January's figure will be released Feb. 6.
The rate jumped to 7.2 percent in December, a 16-year high. Employers cut an average of 510,000 jobs in the last three months of 2008, and may cut a similar amount in January, Reinhart said.
The crush of new and continuing claims has overwhelmed many states' ability to process them all. Electronic filing systems crashed in three states earlier this month, and last week Michigan said it would hire 276 workers and open a fourth call center to handle increased phone traffic.
President Barack Obama's $819 billion economic stimulus package, approved by the House Wednesday and now on its way to the Senate, would provide $500 million to the states to upgrade their unemployment insurance systems. The measure also continues the extended unemployment compensation program, which adds up to 33 weeks of benefits, until the end of the year.
Companies have announced a huge number of layoffs this week as they prepare for an extended period of economic weakness. Economists expect the current recession, which began in December 2007, to be the longest since World War II.
Starbucks Corp. on Wednesday said it would cut 6,700 jobs. The coffee company also said it would close 300 underperforming stores, on top of 600 it already planned to shut down.
Time Warner Inc.'s AOL division is cutting up to 700 jobs, or about 10 percent of the online unit's work force. And IBM Corp. has cut thousands of jobs in its sales, software and hardware divisions in the past week, without announcing specific numbers.
Boeing Co., Pfizer Inc., Home Depot Inc. and other U.S. corporate titans also have announced tens of thousands of job cuts this week alone.
Companies have announced about 130,000 layoffs in January, according to an Associated Press tally.
The Labor Department reported that the number of Americans continuing to claim unemployment insurance for the week ending Jan. 17 was a seasonally adjusted 4.78 million, the highest on records dating back to 1967. That's an increase of 159,000 from the previous week and worse than economists' expectations of 4.65 million.
As a proportion of the work force, the tally of unemployment benefit recipients is the highest since August 1983, a department analyst said.
The total released by the department doesn't include about 1.7 million people receiving benefits under an extended unemployment compensation program authorized by Congress last summer. That means the total number of recipients is actually closer to 6.5 million people.
Businesses continued to hemorrhage jobs Thursday. Ford Motor Co. reported a fourth-quarter loss of $5.9 billion and said its credit arm would cut 20 percent of its work force, or 1,200 jobs. Eastman Kodak Co. said it's cutting 3,500 to 4,500 jobs, or 14 to 18 percent of its work force, as it posted a $137 million quarterly loss on plunging sales of photography products.
In another sign of the deepening recession, the Commerce Department said Thursday that new orders for durable goods dropped by 2.6 percent last month, even worse than the 2 percent decline economists expected. Orders fell 5.7 percent for the year, the second biggest drop on government records, exceeded only by a 10.7 percent plunge in 2001.
The financial markets fell on the news. The Dow Jones industrial average dropped about 110 points in morning trading.
The tally of Americans filing new jobless benefit claims rose slightly to a seasonally adjusted 588,000 last week, from a downwardly revised figure of 585,000 the previous week. That also was worse than analysts' forecast of 575,000 new claims.
The number of initial claims is close to the 26-year high of 589,000 reached in late December, though the work force has grown by about half since then.
The record number of ongoing benefit claims is an indication that laid-off workers are having a difficult time finding new jobs, economists said.
"This highlights the key point that the trend in gross hirings has slowed as abruptly as the trend in gross firings ... has risen," Ian Shepherdson, chief U.S. economist for High Frequency Economics, wrote in a research note.
A year ago, continuing claims stood at about 2.7 million, less than half their current level when the extended unemployment program is included.
Abiel Reinhart, an economic analyst at JPMorgan Chase, said the report indicates the unemployment rate likely rose this month. January's figure will be released Feb. 6.
The rate jumped to 7.2 percent in December, a 16-year high. Employers cut an average of 510,000 jobs in the last three months of 2008, and may cut a similar amount in January, Reinhart said.
The crush of new and continuing claims has overwhelmed many states' ability to process them all. Electronic filing systems crashed in three states earlier this month, and last week Michigan said it would hire 276 workers and open a fourth call center to handle increased phone traffic.
President Barack Obama's $819 billion economic stimulus package, approved by the House Wednesday and now on its way to the Senate, would provide $500 million to the states to upgrade their unemployment insurance systems. The measure also continues the extended unemployment compensation program, which adds up to 33 weeks of benefits, until the end of the year.
Companies have announced a huge number of layoffs this week as they prepare for an extended period of economic weakness. Economists expect the current recession, which began in December 2007, to be the longest since World War II.
Starbucks Corp. on Wednesday said it would cut 6,700 jobs. The coffee company also said it would close 300 underperforming stores, on top of 600 it already planned to shut down.
Time Warner Inc.'s AOL division is cutting up to 700 jobs, or about 10 percent of the online unit's work force. And IBM Corp. has cut thousands of jobs in its sales, software and hardware divisions in the past week, without announcing specific numbers.
Boeing Co., Pfizer Inc., Home Depot Inc. and other U.S. corporate titans also have announced tens of thousands of job cuts this week alone.
Companies have announced about 130,000 layoffs in January, according to an Associated Press tally.
Please Log in or Create an account to join the conversation.
15 years 1 month ago #3
by phase1
Replied by phase1 on topic Jobless Rate Jumps to 7.2 Percent in December
[size=150:3rtsowl8]Jobless rate bolts to 8.1 percent, 651K jobs lost[/size]
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer 4 mins ago
WASHINGTON – The nation's unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.
Both figures were worse than analysts expected and the Labor Department's report shows America's workers being clobbered by a wave of layoffs unlikely to ease in the coming months.
"There is no light at the end of the tunnel with these numbers," said Nigel Gault, economist at IHS Global Insight. "Job losses were everywhere and there's no hope for a turnaround any time soon."
February's net job loss came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.
Employers are shrinking their work forces and turning to other ways to slash costs — including trimming workers' hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.
Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months. President Barack Obama called that tally "astounding," but urged the American people to give him time to let his economic revival plans take root.
"This recovery plan won't turn our economy around or solve every problem," Obama said. "All of this takes time and it will take patience."
With employers showing no appetite to hire, the unemployment jumped half a percentage point from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.
All told, the number of unemployed people climbed to 12.5 million. In addition, the number of people forced to work part time for "economic reasons" rose by a sharp 787,000 to 8.6 million. That's people who would like to work full time but whose hours were cut back or were unable to find full-time work.
If part-time, discouraged workers and others are factored in, the unemployment rate would have been 14.8 percent in February, the highest on records dating to 1994.
The pain hit blue- and white-collar workers, those without a high-school diploma and those highly educated. The jobless rate for people with a bachelor's degree or higher jumped to 4.1 percent last month from 3.8 percent in January. That's the highest on records dating to 1992.
Meanwhile, the average work week in February stayed at 33.3 hours, matching the record low set in December.
On Wall Street, stocks surrendered earlier gains as many market participants had braced for even grimmer unemployment data. The Dow Jones industrial average dipped about 25 points in midday trading and broader indexes also fell.
Job losses were widespread last month.
Construction companies eliminated 104,000 jobs. Factories axed 168,000. Retailers cut nearly 40,000. Professional and business services got rid of 180,000, with 78,000 jobs lost at temporary-help agencies. Financial companies reduced payrolls by 44,000. Leisure and hospitality firms chopped 33,000 positions.
The few areas spared: education and health services, as well as government, which boosted employment last month.
Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to lay off workers. It's a vicious cycle in which all the economy's negative problems feed on each other, worsening the downward spiral.
A new wave of layoffs hit this week.
General Dynamics Corp. said Thursday it will lay off 1,200 workers due partly to plummeting sales of business and personal jets that forced it to cut production. Defense contractor Northrop Grumman Corp., and Tyco Electronics Ltd., which makes electronic components, undersea telecommunications systems and wireless equipment, also are trimming payrolls.
The country is getting bloodied by fallout from the housing, credit and financial crises_ the worst since the 1930s. And there's no easy fix for a quick turnaround, economists said.
Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts; a revamped, multibillion-dollar bailout program for the nation's troubled banks; and a $75 billion effort to stem home foreclosures.
Even in the best-case scenario that the relief efforts work and the recession ends later in 2009, the unemployment rate is expected to keep climbing, hitting 9 percent or higher this year. In fact, the Federal Reserve thinks the unemployment rate will stay elevated into 2011. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013.
Businesses won't be inclined to ramp up hiring until they are sure any economic recovery has staying power.
The economy contracted at a staggering 6.2 percent in the final three months of 2008, the worst showing in a quarter-century, and it will probably continue to shrink during the first six months of this year.
Given Friday's grim figures, Gault predicted the economy would probably shrink in the first quarter at a pace of at least 6 percent, and that the unemployment rate will rise as high as 10 percent in the first half of 2010.
Fed Chairman Ben Bernanke told Congress earlier this week that recent economic barometers "show little sign of improvement" and suggest that "labor market conditions may have worsened further in recent weeks."
By JEANNINE AVERSA, AP Economics Writer Jeannine Aversa, Ap Economics Writer 4 mins ago
WASHINGTON – The nation's unemployment rate bolted to 8.1 percent in February, the highest since late 1983, as cost-cutting employers slashed 651,000 jobs amid a deepening recession.
Both figures were worse than analysts expected and the Labor Department's report shows America's workers being clobbered by a wave of layoffs unlikely to ease in the coming months.
"There is no light at the end of the tunnel with these numbers," said Nigel Gault, economist at IHS Global Insight. "Job losses were everywhere and there's no hope for a turnaround any time soon."
February's net job loss came after even deeper payroll reductions in the prior two months, according to revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.
Employers are shrinking their work forces and turning to other ways to slash costs — including trimming workers' hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.
Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months. President Barack Obama called that tally "astounding," but urged the American people to give him time to let his economic revival plans take root.
"This recovery plan won't turn our economy around or solve every problem," Obama said. "All of this takes time and it will take patience."
With employers showing no appetite to hire, the unemployment jumped half a percentage point from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.
All told, the number of unemployed people climbed to 12.5 million. In addition, the number of people forced to work part time for "economic reasons" rose by a sharp 787,000 to 8.6 million. That's people who would like to work full time but whose hours were cut back or were unable to find full-time work.
If part-time, discouraged workers and others are factored in, the unemployment rate would have been 14.8 percent in February, the highest on records dating to 1994.
The pain hit blue- and white-collar workers, those without a high-school diploma and those highly educated. The jobless rate for people with a bachelor's degree or higher jumped to 4.1 percent last month from 3.8 percent in January. That's the highest on records dating to 1992.
Meanwhile, the average work week in February stayed at 33.3 hours, matching the record low set in December.
On Wall Street, stocks surrendered earlier gains as many market participants had braced for even grimmer unemployment data. The Dow Jones industrial average dipped about 25 points in midday trading and broader indexes also fell.
Job losses were widespread last month.
Construction companies eliminated 104,000 jobs. Factories axed 168,000. Retailers cut nearly 40,000. Professional and business services got rid of 180,000, with 78,000 jobs lost at temporary-help agencies. Financial companies reduced payrolls by 44,000. Leisure and hospitality firms chopped 33,000 positions.
The few areas spared: education and health services, as well as government, which boosted employment last month.
Disappearing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, driving companies to lay off workers. It's a vicious cycle in which all the economy's negative problems feed on each other, worsening the downward spiral.
A new wave of layoffs hit this week.
General Dynamics Corp. said Thursday it will lay off 1,200 workers due partly to plummeting sales of business and personal jets that forced it to cut production. Defense contractor Northrop Grumman Corp., and Tyco Electronics Ltd., which makes electronic components, undersea telecommunications systems and wireless equipment, also are trimming payrolls.
The country is getting bloodied by fallout from the housing, credit and financial crises_ the worst since the 1930s. And there's no easy fix for a quick turnaround, economists said.
Obama is counting on a multipronged assault to lift the country out of recession: a $787 billion stimulus package of increased federal spending and tax cuts; a revamped, multibillion-dollar bailout program for the nation's troubled banks; and a $75 billion effort to stem home foreclosures.
Even in the best-case scenario that the relief efforts work and the recession ends later in 2009, the unemployment rate is expected to keep climbing, hitting 9 percent or higher this year. In fact, the Federal Reserve thinks the unemployment rate will stay elevated into 2011. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013.
Businesses won't be inclined to ramp up hiring until they are sure any economic recovery has staying power.
The economy contracted at a staggering 6.2 percent in the final three months of 2008, the worst showing in a quarter-century, and it will probably continue to shrink during the first six months of this year.
Given Friday's grim figures, Gault predicted the economy would probably shrink in the first quarter at a pace of at least 6 percent, and that the unemployment rate will rise as high as 10 percent in the first half of 2010.
Fed Chairman Ben Bernanke told Congress earlier this week that recent economic barometers "show little sign of improvement" and suggest that "labor market conditions may have worsened further in recent weeks."
Please Log in or Create an account to join the conversation.