Saturday, November 05, 2011
U.S. economy: 103,000 jobs added but unemployment still at 9.1%
From The Hindu
The Obama administration dodged a bullet today when the United States Bureau of Labour Statistics announced in its jobs report for September that non-farm payroll employment edged up by 103,000 although the unemployment rate held at 9.1 per cent.
However the BLS poured cold water on the ostensible pause in the economy’s downward slide when it pointed out that the increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August.
Even as markets continued to be roiled in the wake of uncertainty regarding the pace of the recovery, the BLS however underscored some stability in unemployment numbers, noting that the number of unemployed persons, at 14.0 million, was essentially unchanged in September.
However some worrisome trends persisted beneath the aggregate figures as the number of long-term unemployed, that is those jobless for 27 weeks or more, was 6.2 million in September and they accounted for whopping 44.6 percent of the unemployed.
In a further indication that business hiring and employment were far from brisk the number of persons employed part time for economic reasons, sometimes referred to as involuntary part-time workers, reportedly rose to 9.3 million. “These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job,” the BLS said.
Describing the unemployment rate of 9.1 per cent as “unacceptably high,” Katherine Abraham, Member of the Council of Economic Advisors, however lauded the private sector for adding 2.6 million jobs for 19 straight months, with a total of 137,000 jobs added last month.
Arguing that there was a clear need for faster economic growth to put Americans back to work, Ms. Abraham said that the BLS report underscored President Barack Obama’s call for Congress to pass the American Jobs Act “to put more money in the pockets of working and middle class families; to make it easier for small businesses to hire workers; to keep teachers in the classroom; to put construction crews to work rebuilding our nation’s infrastructure; and other measures that will help the economy grow while not adding to the deficit over ten years.”
In terms of specific sectors that added jobs last month, employment in professional and business services increased by 48,000; in health care it continued to expand with an increase of 44,000; in construction employment increased by 26,000 jobs; and employment in the information sector rose by 34,000. Among the sectors that shed jobs was retail trade, in which employment declined in electronic and appliance stores by 9,000 jobs.
However it was principally in the public sector that the largest declines in employment levels occurred, with government employment continuing to trend down by 34,000 jobs. The U.S. Postal Service also continued to lose jobs and was down by 5,000, while local government employment which had fallen by 535,000 since September 2008, declined by 35,000.
The BLS said that the average hourly earnings for all employees on private non-farm payrolls increased by 4 cents, or 0.2 per cent, to $23.12.
Labels: America job loss, U.S. economy, unemployment
Obama seeks $447bn "jolt" for job creation
When is a stimulus package not a stimulus package? When it's been paid for. At least that's what United States President Barack Obama hoped to underscore when he unveiled a $447-billion plan before the U.S. Congress, a combination of tax code and expenditure reforms aimed at creating an undefined number of jobs and jumpstarting the ailing U.S. economy.
“It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and if they hire, there will be customers for their products and services. You should pass this jobs plan right away,” the President said on Thursday night.
In a move that surely bolstered his centrist credentials, the President sought to woo his truculent Republican opposition in Congress through what the White House has labelled the American Jobs Act, a proposal that remained silent on actual job-creation projections and details of the financing mathematics.
What is known is that the plan, which was obviously forged in the cauldron of the 2012 presidential election, included a “centrepiece” $240-billion payroll tax cut for employers and employees; a $50-billion proposal to invest in highways, railroad and airport modernisation; a $10-billion infusion to Mr. Obama's idea of a national infrastructure bank; a $35-billion initiative to stem the layoffs of nearly 280,000 public sector workers; a $30-billion project to modernise 35,000 public schools; a $49-billion scheme to extend insurance payments for the long-term unemployed; and a “returning heroes” tax credit to “spur hiring of Iraq and Afghanistan war veterans”.
While he pleaded no fewer than 17 times that Congress should “pass this bill,” there was little doubt that Mr. Obama had deftly manoeuvred to put Republicans on back-foot.
His speech in the Capitol saw him concede to some of their demands such as expenditure reform in Democrat-favoured Medicare; yet he equally pressed them to yield ground on their top priority — blocking any form of tax hike on the wealthiest Americans.
Taking a dig at continuing partisan logjam on Capitol Hill, Mr. Obama also warned the U.S. Congress that it was short on time.
While some legislators may have decided that party differences could only be resolved them at the ballot box, he warned, “The next election is 14 months away... the people who hired us to work for them... don't have the luxury of waiting 14 months. Some of them are living week to week, paycheque to paycheque, even day to day. They need help, and they need it now.”
In particular Mr. Obama kept up the pressure on Republicans, presently under the sway of the fiscally ultra-conservative Tea Party, to stop insisting on tax loopholes for oil companies and tax breaks for millionaires and billionaires.
“This isn't political grandstanding... [or] class warfare. This is simple math... [and] these are real choices,” said Mr. Obama.
For all its bells and whistles, however, the American Jobs Act has received a lukewarm, mixed response from different constituents.
Republicans such as Senate Minority Leader Mitch McConnell called the initiative “a re-election plan,” saying, “It's time the President starts thinking less about how to describe his policies differently and more time thinking about devising new policies.”
Even liberal economist and Nobel laureate Paul Krugman criticised the scale of the proposals, arguing that the “lingering effects of the housing bust and the overhang of household debt from the bubble years are creating a roughly $1 trillion per year hole in the U.S. economy, and this plan... would fill only part of that hole.”
Labels: Barack Obama, tax cuts, U.S. debt crisis, unemployment
Friday, June 03, 2011
U.S. unemployment hits plateau at 9.1 per cent
From The Hindu
The United States labour markets continued to be buffeted by the economic downturn, with a mere 54,000 payroll employment jobs added in May, which left the overall unemployment rate essentially unchanged at 9.1 per cent.
The grim news came when U.S. Bureau of Labour Statistics released its monthly jobs report, in which it said although private-sector employment continued to trend up with a net addition of 83,000 jobs, even that figure was a much smaller amount than the average for the prior three months, which was 244,000.
Reacting to the negative news, even as President Barack Obama continued to keep job creation at the top of his 2011 policy agenda, the Chairman of the Council of Economic Advisers, Austan Goolsbee, said, “There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years.”
While he sought to focus attention on private-sector job growth arguing that this sector added more than 2.1 million jobs over the past 15 months, Mr. Goolsbee conceded that the unemployment rate was “unacceptably high and faster growth is needed to replace the jobs lost in the downturn.”
The slowdown in the jobs growth rate comes at a particularly challenging time for the Obama White House, as the recent clashes with the U.S. Congress over raising nation’s the debt limit are likely to put the brakes on any further initiatives to boost employment. In this context Mr. Goolsbee noted, “We will continue to work with Congress to responsibly reduce the deficit and live within our means.”
Thus while numerous measures such as the payroll tax cuts and business incentives for investment have already been implemented and may well have contributed to employment growth thus far, even Mr. Goolsbee admitted that the latest BLS report “is a reminder of the challenges that remain.”
Most worrying for the current administration must be what the BLS report indicates about stalled recovery in the manufacturing, real estate and construction sectors. The report said that employment in some manufacturing areas actually dipped in May, with 5,000 jobs being lost.
Construction employment was essentially unchanged in May, the report said, noting that employment in the industry has “shown little movement on net since early 2010, after having fallen sharply during the 2007-09 period.”
Further the report suggested that states and local governments were continuing to reel under deficit pressures. Employment in local government declined during May, by 28,000 jobs. In fact since an employment peak in September 2008 local governments in the U.S. have lost 446,000 jobs, the report cautioned.
Yet Mr. Goolsbee struck a note of hope on the employment-boosting policies of the administration. He said, “We are focused on promoting exports, reducing regulatory burdens and making the investments in education, research and development, and infrastructure that will grow our economy and create jobs.”
The United States labour markets continued to be buffeted by the economic downturn, with a mere 54,000 payroll employment jobs added in May, which left the overall unemployment rate essentially unchanged at 9.1 per cent.
The grim news came when U.S. Bureau of Labour Statistics released its monthly jobs report, in which it said although private-sector employment continued to trend up with a net addition of 83,000 jobs, even that figure was a much smaller amount than the average for the prior three months, which was 244,000.
Reacting to the negative news, even as President Barack Obama continued to keep job creation at the top of his 2011 policy agenda, the Chairman of the Council of Economic Advisers, Austan Goolsbee, said, “There are always bumps on the road to recovery, but the overall trajectory of the economy has improved dramatically over the past two years.”
While he sought to focus attention on private-sector job growth arguing that this sector added more than 2.1 million jobs over the past 15 months, Mr. Goolsbee conceded that the unemployment rate was “unacceptably high and faster growth is needed to replace the jobs lost in the downturn.”
The slowdown in the jobs growth rate comes at a particularly challenging time for the Obama White House, as the recent clashes with the U.S. Congress over raising nation’s the debt limit are likely to put the brakes on any further initiatives to boost employment. In this context Mr. Goolsbee noted, “We will continue to work with Congress to responsibly reduce the deficit and live within our means.”
Thus while numerous measures such as the payroll tax cuts and business incentives for investment have already been implemented and may well have contributed to employment growth thus far, even Mr. Goolsbee admitted that the latest BLS report “is a reminder of the challenges that remain.”
Most worrying for the current administration must be what the BLS report indicates about stalled recovery in the manufacturing, real estate and construction sectors. The report said that employment in some manufacturing areas actually dipped in May, with 5,000 jobs being lost.
Construction employment was essentially unchanged in May, the report said, noting that employment in the industry has “shown little movement on net since early 2010, after having fallen sharply during the 2007-09 period.”
Further the report suggested that states and local governments were continuing to reel under deficit pressures. Employment in local government declined during May, by 28,000 jobs. In fact since an employment peak in September 2008 local governments in the U.S. have lost 446,000 jobs, the report cautioned.
Yet Mr. Goolsbee struck a note of hope on the employment-boosting policies of the administration. He said, “We are focused on promoting exports, reducing regulatory burdens and making the investments in education, research and development, and infrastructure that will grow our economy and create jobs.”
Labels: Obama administration, U.S., U.S. Bureau of Labour Statistics, U.S. economy, unemployment
Monday, December 06, 2010
Uptick in U.S. jobless rate
From The Hindu
The U.S. economy's unemployment rate climbed to 9.8 per cent in November, according to the Bureau of Labour Statistics (BLS) monthly report, made available on Friday. It was hovering at 9.6 per cent in each of the prior three months, the BLS cautioned.
In a development that is almost certain to increase pressure on the Obama administration to intensify its job-creation efforts, the BLS also noted that nonfarm payroll employment barely changed, adding a mere 39,000 jobs. This marks the worst month for the U.S. job market, since September.
Worryingly one of the main sectors that added jobs was temporary help services — reflecting a shortfall in permanent job creation. The only other sector to add significantly to the jobs total was healthcare. Employment in retail trade, however, fell and in most major industries it changed little over the month.
Reflecting continuing weakness in job markets across sectors, the BLS data suggested that the number of job losers and persons who completed temporary jobs rose by 390,000 to 9.5 million in November.
The number of people who were looking for permanent jobs but not finding them remained more or less unchanged at 9 million.
Many of the workers in this category were employed part time for economic reasons, that is, because their hours had been cut-back or because they were unable to find a full-time job, the BLS said.
The numbers of those who were not in the labour force but wanted and were available for work and had looked for a job sometime in the prior 12 months, rose from 2.3 million a year earlier. The November joblessness figures did not include such individuals as they had not searched for work in the four weeks preceding the survey.
In the professional and business services sectors, employment in temporary help services continued to increase in November, with 40,000 jobs added, the BLS report said.
It also noted that employment in mining continued to trend up over the month and support activities for mining added 6,000 jobs in November.
The U.S. economy's unemployment rate climbed to 9.8 per cent in November, according to the Bureau of Labour Statistics (BLS) monthly report, made available on Friday. It was hovering at 9.6 per cent in each of the prior three months, the BLS cautioned.
In a development that is almost certain to increase pressure on the Obama administration to intensify its job-creation efforts, the BLS also noted that nonfarm payroll employment barely changed, adding a mere 39,000 jobs. This marks the worst month for the U.S. job market, since September.
Worryingly one of the main sectors that added jobs was temporary help services — reflecting a shortfall in permanent job creation. The only other sector to add significantly to the jobs total was healthcare. Employment in retail trade, however, fell and in most major industries it changed little over the month.
Reflecting continuing weakness in job markets across sectors, the BLS data suggested that the number of job losers and persons who completed temporary jobs rose by 390,000 to 9.5 million in November.
The number of people who were looking for permanent jobs but not finding them remained more or less unchanged at 9 million.
Many of the workers in this category were employed part time for economic reasons, that is, because their hours had been cut-back or because they were unable to find a full-time job, the BLS said.
The numbers of those who were not in the labour force but wanted and were available for work and had looked for a job sometime in the prior 12 months, rose from 2.3 million a year earlier. The November joblessness figures did not include such individuals as they had not searched for work in the four weeks preceding the survey.
In the professional and business services sectors, employment in temporary help services continued to increase in November, with 40,000 jobs added, the BLS report said.
It also noted that employment in mining continued to trend up over the month and support activities for mining added 6,000 jobs in November.
Labels: Bureau of Labour Statistics, unemployment, United States
Saturday, September 04, 2010
U.S. joblessness edges up
From The Hindu
The unemployment situation in the U.S. economy persisted at a low-level equilibrium in August, with non-farm jobs dropping by 54,000 and the overall unemployment rate climbing by one percentage point to 9.6 per cent, or 14.9 million unemployed persons.
According to the monthly figures released by the U.S. Bureau of Labour Statistics (BLS) private payrolls however showed some positive growth, bringing cheer to markets at the end of the week. The Dow Jones industrial average rose 1 per cent in early trading on Friday and in London the FTSE was up 1.24 per cent.
After a dismal August filled with negative economic news, most of it suggesting that the recovery had slowed significantly, the BLS noted that private sector payroll employment “continued to trend up modestly,” by 67,000 jobs.
However government employment fell, as 1.14 lakh temporary workers hired for the decennial census completed their work, the BLS report said. As a result the number had changed little in August.
Speaking shortly after the release of the BLS figures President Barack Obama said, “There is no quick fix to the worst recession we have experienced since the Great Depression.”
However he reassured Americans that there were “better days ahead,” reiterating that 67,000 private sector jobs were added in August although the month he took office 7.50 lakh jobs were lost. The evidence in the August report suggested that the U.S. economy was still far from escaping the clutches of the recession.
The unemployment situation in the U.S. economy persisted at a low-level equilibrium in August, with non-farm jobs dropping by 54,000 and the overall unemployment rate climbing by one percentage point to 9.6 per cent, or 14.9 million unemployed persons.
According to the monthly figures released by the U.S. Bureau of Labour Statistics (BLS) private payrolls however showed some positive growth, bringing cheer to markets at the end of the week. The Dow Jones industrial average rose 1 per cent in early trading on Friday and in London the FTSE was up 1.24 per cent.
After a dismal August filled with negative economic news, most of it suggesting that the recovery had slowed significantly, the BLS noted that private sector payroll employment “continued to trend up modestly,” by 67,000 jobs.
However government employment fell, as 1.14 lakh temporary workers hired for the decennial census completed their work, the BLS report said. As a result the number had changed little in August.
Speaking shortly after the release of the BLS figures President Barack Obama said, “There is no quick fix to the worst recession we have experienced since the Great Depression.”
However he reassured Americans that there were “better days ahead,” reiterating that 67,000 private sector jobs were added in August although the month he took office 7.50 lakh jobs were lost. The evidence in the August report suggested that the U.S. economy was still far from escaping the clutches of the recession.
Labels: Bureau of Labour Statistics, unemployment
Saturday, August 07, 2010
131,000 jobs lost in U.S. in July; unemployment rate flat
From The Hindu
Total nonfarm payroll employment declined by 131,000 in July and the enemployment rate was unchanged at 9.5 per cent, the Unite States Bureau of Labour Statistics (BLS) has reported.
In worrying news for the Obama administration, as it heads towards November Congressional elections, the BLS added that federal government employment dropped sharply, as 143,000 temporary workers recruited for the decennial census completed their work. Private-sector payroll employment however crept up by 71,000.
Even as the White House has sought to bring job creation to the top of its agenda after the Wall Street reform bill was passed last month, the July unemployment numbers suggested improvements in job market conditions had flatlined.
In particular the BLS figures suggested that the numbers of those jobless for 27 weeks and over was little changed at 6.6 million and the numbers of those employed part-time for economic reasons – referred to as involuntary part-time workers – was essentially unchanged over the month at 8.5 million.
Manufacturing employment was one of the few areas that showed an uptick, with job numbers increasing by 36,000 over July. The BLS said that motor vehicles and parts had fewer seasonal layoffs than normal for July, and this had contributed to a seasonally adjusted employment increase of 21,000. Other sectors such as mining, fabricated metals, transportation and warehousing and health care also added jobs.
However there was more bad news for employment in financial activities, which continued to show a negative trend in July. Jobs in this sector declined by 17,000, bringing the average monthly job loss figure in the industry to 12,000. The agency added that employment in other private-sector industries, including wholesale trade, retail trade, information, and leisure and hospitality showed little change in July.
Total nonfarm payroll employment declined by 131,000 in July and the enemployment rate was unchanged at 9.5 per cent, the Unite States Bureau of Labour Statistics (BLS) has reported.
In worrying news for the Obama administration, as it heads towards November Congressional elections, the BLS added that federal government employment dropped sharply, as 143,000 temporary workers recruited for the decennial census completed their work. Private-sector payroll employment however crept up by 71,000.
Even as the White House has sought to bring job creation to the top of its agenda after the Wall Street reform bill was passed last month, the July unemployment numbers suggested improvements in job market conditions had flatlined.
In particular the BLS figures suggested that the numbers of those jobless for 27 weeks and over was little changed at 6.6 million and the numbers of those employed part-time for economic reasons – referred to as involuntary part-time workers – was essentially unchanged over the month at 8.5 million.
Manufacturing employment was one of the few areas that showed an uptick, with job numbers increasing by 36,000 over July. The BLS said that motor vehicles and parts had fewer seasonal layoffs than normal for July, and this had contributed to a seasonally adjusted employment increase of 21,000. Other sectors such as mining, fabricated metals, transportation and warehousing and health care also added jobs.
However there was more bad news for employment in financial activities, which continued to show a negative trend in July. Jobs in this sector declined by 17,000, bringing the average monthly job loss figure in the industry to 12,000. The agency added that employment in other private-sector industries, including wholesale trade, retail trade, information, and leisure and hospitality showed little change in July.
Labels: U.S. jobs, unemployment
Friday, July 02, 2010
U.S. lost 125,000 jobs in June
From The Hindu
Stoking fears of a “double-dip” recession amidst a fragile global economic recovery, the United States Bureau of Labour Statistics (BLS) on Friday reported the total nonfarm payroll employment declined by declined by 125,000 in June.
The decline in payroll employment reflected a decrease of 225,000 jobs among the temporary employees working on the payroll of the U.S. Census 2010, the BLS noted, adding however that private-sector payroll employment edged up by 83,000 for the month and the overall unemployment rate edged down to 9.5 per cent.
Commenting on the results, President Barack Obama said that despite the job losses last month, “All told, our economy has created nearly 600,000 private sector jobs this year. [And that is] a stark turnaround from the first six months of last year, when we lost 3.7 million jobs at the height of the recession.”
In a statement following the BLS announcement Mr. Obama admitted, “We are not headed there fast enough for a lot of Americans. We’re not headed there fast enough for me, either… And we continue to fight headwinds from volatile global markets.”
However he also announced that as part of the efforts to spur on the recovery in the U.S. economy, his administration would invest in 66 new projects across America that would aim to bring “reliable broadband Internet service to communities that currently have little or no access.” These projects would create about 5,000 construction and installation jobs around the country, he noted.
Following the monthly update, Christina Romer, Chair of Mr. Obama’s Council of Economic Advisers, said, “Today’s employment report shows continued signs of gradual labour market recovery… However, much stronger job gains are needed to repair the damage caused by the financial crisis and put the millions of unemployed Americans back to work.”
Explaining the employment impact of 2010 census she said, “[The payroll employment] decline had been widely anticipated because some of the temporary employment related to the Census began to wind down last month.” She noted that non-Census employment rose by 100,000, reflecting a rise in private employment of 83,000 and a rise in other types of Federal employment.
Ms. Romer added that it was important to emphasise the magnitude of the damage that remained following the recession. “That is why the President continues to work with the Congress to pass targeted jobs measures such as an extension of emergency unemployment insurance, a program for small business lending that will enable small firms to get the credit they need to expand and create jobs, and more aid for troubled state and local governments to prevent layoffs of teachers, fire-fighters, and police,” she said.
Seeking to touch an optimistic note Mr. Obama said, “Now, Sunday is the Fourth of July. And if that date reminds us of anything, it’s that America has never backed down from a challenge. We’ve faced our share of tough times before. But in such moments, we don’t flinch. We dig deeper, we innovate, we compete and we win.”
Stoking fears of a “double-dip” recession amidst a fragile global economic recovery, the United States Bureau of Labour Statistics (BLS) on Friday reported the total nonfarm payroll employment declined by declined by 125,000 in June.
The decline in payroll employment reflected a decrease of 225,000 jobs among the temporary employees working on the payroll of the U.S. Census 2010, the BLS noted, adding however that private-sector payroll employment edged up by 83,000 for the month and the overall unemployment rate edged down to 9.5 per cent.
Commenting on the results, President Barack Obama said that despite the job losses last month, “All told, our economy has created nearly 600,000 private sector jobs this year. [And that is] a stark turnaround from the first six months of last year, when we lost 3.7 million jobs at the height of the recession.”
In a statement following the BLS announcement Mr. Obama admitted, “We are not headed there fast enough for a lot of Americans. We’re not headed there fast enough for me, either… And we continue to fight headwinds from volatile global markets.”
However he also announced that as part of the efforts to spur on the recovery in the U.S. economy, his administration would invest in 66 new projects across America that would aim to bring “reliable broadband Internet service to communities that currently have little or no access.” These projects would create about 5,000 construction and installation jobs around the country, he noted.
Following the monthly update, Christina Romer, Chair of Mr. Obama’s Council of Economic Advisers, said, “Today’s employment report shows continued signs of gradual labour market recovery… However, much stronger job gains are needed to repair the damage caused by the financial crisis and put the millions of unemployed Americans back to work.”
Explaining the employment impact of 2010 census she said, “[The payroll employment] decline had been widely anticipated because some of the temporary employment related to the Census began to wind down last month.” She noted that non-Census employment rose by 100,000, reflecting a rise in private employment of 83,000 and a rise in other types of Federal employment.
Ms. Romer added that it was important to emphasise the magnitude of the damage that remained following the recession. “That is why the President continues to work with the Congress to pass targeted jobs measures such as an extension of emergency unemployment insurance, a program for small business lending that will enable small firms to get the credit they need to expand and create jobs, and more aid for troubled state and local governments to prevent layoffs of teachers, fire-fighters, and police,” she said.
Seeking to touch an optimistic note Mr. Obama said, “Now, Sunday is the Fourth of July. And if that date reminds us of anything, it’s that America has never backed down from a challenge. We’ve faced our share of tough times before. But in such moments, we don’t flinch. We dig deeper, we innovate, we compete and we win.”
Labels: Barack Obama, Bureau of Labour Statistics, jobs, U.S., unemployment
Saturday, April 03, 2010
U.S. unemployment rate holds steady
From The Hindu
Unemployment remained at near-peak levels in March, with 15 million people, or 9.7 per cent of the labour force, out of work during the month, figures released by the Bureau of Labour Statistics today showed.
However the BLS report also said that non-farm payroll employment increased by 162,000 -- a large part of the addition to jobs coming from temporary help services (40,000 jobs) and health care (27,000 jobs). Employment in Federal Government also registered an increase, reflecting the hiring of temporary workers for the decennial Census 2010 (48,000 jobs). The report however said “Employment continued to decline in financial activities and in information.”
Observers noted that job-creation was at its best since March 2007, yet cautioned that this figure would have been lower if not for the temporary hires for the Census. They further said that the March numbers reflected a relative jump from February's lower figures, which “had been depressed by temporary job losses related to severe winter storms.”
According to Christina Romer, Chair of the administration’s Council of Economic Advisers, “It is obvious that the American labour market remains severely distressed. More than eight million Americans have lost their jobs since the start of the recession in December 2007. It will take sustained, robust employment growth to bring the unemployment rate down.”
Speaking to The Hindu Gary Burtless, Senior Fellow at the Brookings Institution, said that a range of government stimulus-related policies, including $65 billion in aid to the unemployed, the financial markets rescues of 2008 and 2009, and ongoing fiscal relief to state governments had each played a role in supporting ordinary American households by shoring up their labour income, financial income and proprietor income, and offsetting the “huge loss” in their wealth due to falling housing prices.
Explaining the latest figures, Mr. Burtless also said, “The rise in the number of employed has been only slightly larger than the increase in the number of Americans in the labour market. This helps explain why the unemployment rate remains stubbornly high.” Nonetheless, it is an encouraging sign that people who were out of the labour force three or four months ago now believe it is worthwhile to look for a job, Mr. Burtless added.
According to the BLS report, among the major worker groups, the unemployment rates for adult men (10.0 per cent), adult women (8.0 per cent), teenagers (26.1 per cent), whites (8.8 per cent), African-Americans (16.5 per cent), and Hispanics (12.6 per cent) showed little or no change in March. The jobless rate for Asians was 7.5 per cent, it added.
The Obama administration may worry, however, that the number of long-term unemployed – those jobless for 27 weeks or more – increased by 414,000 to 6.5 million. It may also be increasingly concerned about the structure of employment -- involuntary part-time workers, or those working part time but not by their own choosing increased to 9.1 million in March. Typically such workers work part-time for economic reasons, such as their hours being cut back or their inability to find a full-time job.
Further the February scenario of a large number of “marginally attached” individuals was seen again in March – around 2.3 million persons were not in the labour force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. Yet the BLS did not count such individuals as unemployed “because they had not searched for work in the 4 weeks pre-ceding the survey.”
In the private sector, manufacturing employment showed an increasing trend, while construction, transportation and warehousing, leisure and hospitality, retail and wholesale trade held steady. Financial activities jobs continued their downward trend, shedding 21,000 jobs in March. Employment in the information industry decreased by 12,000, the report added.
Unemployment remained at near-peak levels in March, with 15 million people, or 9.7 per cent of the labour force, out of work during the month, figures released by the Bureau of Labour Statistics today showed.
However the BLS report also said that non-farm payroll employment increased by 162,000 -- a large part of the addition to jobs coming from temporary help services (40,000 jobs) and health care (27,000 jobs). Employment in Federal Government also registered an increase, reflecting the hiring of temporary workers for the decennial Census 2010 (48,000 jobs). The report however said “Employment continued to decline in financial activities and in information.”
Observers noted that job-creation was at its best since March 2007, yet cautioned that this figure would have been lower if not for the temporary hires for the Census. They further said that the March numbers reflected a relative jump from February's lower figures, which “had been depressed by temporary job losses related to severe winter storms.”
According to Christina Romer, Chair of the administration’s Council of Economic Advisers, “It is obvious that the American labour market remains severely distressed. More than eight million Americans have lost their jobs since the start of the recession in December 2007. It will take sustained, robust employment growth to bring the unemployment rate down.”
Speaking to The Hindu Gary Burtless, Senior Fellow at the Brookings Institution, said that a range of government stimulus-related policies, including $65 billion in aid to the unemployed, the financial markets rescues of 2008 and 2009, and ongoing fiscal relief to state governments had each played a role in supporting ordinary American households by shoring up their labour income, financial income and proprietor income, and offsetting the “huge loss” in their wealth due to falling housing prices.
Explaining the latest figures, Mr. Burtless also said, “The rise in the number of employed has been only slightly larger than the increase in the number of Americans in the labour market. This helps explain why the unemployment rate remains stubbornly high.” Nonetheless, it is an encouraging sign that people who were out of the labour force three or four months ago now believe it is worthwhile to look for a job, Mr. Burtless added.
According to the BLS report, among the major worker groups, the unemployment rates for adult men (10.0 per cent), adult women (8.0 per cent), teenagers (26.1 per cent), whites (8.8 per cent), African-Americans (16.5 per cent), and Hispanics (12.6 per cent) showed little or no change in March. The jobless rate for Asians was 7.5 per cent, it added.
The Obama administration may worry, however, that the number of long-term unemployed – those jobless for 27 weeks or more – increased by 414,000 to 6.5 million. It may also be increasingly concerned about the structure of employment -- involuntary part-time workers, or those working part time but not by their own choosing increased to 9.1 million in March. Typically such workers work part-time for economic reasons, such as their hours being cut back or their inability to find a full-time job.
Further the February scenario of a large number of “marginally attached” individuals was seen again in March – around 2.3 million persons were not in the labour force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. Yet the BLS did not count such individuals as unemployed “because they had not searched for work in the 4 weeks pre-ceding the survey.”
In the private sector, manufacturing employment showed an increasing trend, while construction, transportation and warehousing, leisure and hospitality, retail and wholesale trade held steady. Financial activities jobs continued their downward trend, shedding 21,000 jobs in March. Employment in the information industry decreased by 12,000, the report added.
Labels: Bureau of Labour Statistics, U.S., unemployment
Wednesday, December 16, 2009
Curbs on financial excess
From The Hindu
After dedicating most of 2009 to jump-starting financial markets through stimulus packages, developed countries are now turning their attention to reforming the basic architecture of those markets, especially the incentives for risk-taking. In a major step towards regulating systemic risks, the United Kingdom last week announced a one-off 50 per cent “super-tax” on bankers’ discretionary bonuses exceeding £25,000. The move could raise £550 million, which would be used to help reduce unemployment, according to Chancellor Alistair Darling. However it has generated, as expected, a torrent of resistance from financial services firms, including threats that they would mass-migrate to other countries. By way of response, an aide to the Chancellor has asserted that the solution was for the banks to “pay less in bonuses” and to realise that this tax was “about changing their behaviour, not raising revenue.” Other members of the European Union such as France and Germany have come out in support of the policy, with France imposing a similar super-tax on bonuses exceeding €27,000. Executive pay has come under fire in the United States too. Kenneth Feinberg, President Obama’s pay czar, has sharply cut cash compensation, requiring instead that 175 most-paid executives in bailed-out companies hold stock compensation for two to four years.
Yet pay is only one dimension of a culture of excessive risk-taking, which precipitated the credit crisis on the back of lax regulatory standards and the availability of cheap credit. Only a comprehensive overhaul of regulatory oversight, of the kind passed by the U.S. House of Representatives last week, stands a reasonable chance of changing deeply entrenched attitudes towards risk. The reform proposals, which mirror some of the policies enacted in the EU, include tighter regulation of derivative instruments, procedures for managing collapse at large banks without resorting to taxpayer money, and the creation of a Consumer Financial Protection Agency to monitor lending practices. The bill also seeks to empower lawmakers to oversee the functioning of the U.S. Treasury and Federal Reserve — not a bad thing considering it was these institutions, during the time of Alan Greenspan, that stubbornly held interest rates at artificially low levels, setting off credit-driven asset bubbles. Finally, the reforms seek to extend the powers of the Securities and Exchange Commission to aggressively patrol the fringes of the financial universe, including hedge funds, with the aim of foiling would-be Madoffs and Rajaratnams. Even as the U.S. and Europe struggle to get unemployment under control over the coming years, they would do well to persist in their mission to curb financial excess through serious institutional reforms.
Labels: EU, financial markets, Madoff, Rajaratnam, stimulus packages, unemployment
Sunday, December 06, 2009
Tackling a jobless recovery
From The Hindu
Even as the Obama administration pushes forward with its Af-Pak and healthcare reform policies this month, joblessness in United States will increasingly dominate the attention of the President, Congress and the ordinary Americans. Unemployment may have fallen marginally in November after touching a 26-year high of 10.2 per cent in the month before, but the Federal Reserve has projected that even with positive economic growth it will hover around 8.3-8.7 per cent during 2010. Over the coming months, President Obama will worry that four states that are all Democratic bastions — Michigan, Nevada, Rhode Island, and California — will see the highest rates of unemployment. He will have to also struggle with the limited room for manoeuvre in public finances implied by staggering levels of public debt and the overall budget deficit. Given the elevated spending commitments in the Af-Pak region and subsidies for the proposed healthcare reform, there is practically no fiscal leeway to tackle America’s jobless recovery through further stimulus-like measures.
Yet the deterioration in labour market conditions for middle-class Americans is an ominous threat to President Obama’s already-falling popularity. With the entire House of Representatives and a part of the Senate facing elections next year a decisive strategy to create jobs quickly has become imperative, even urgent. The government has a range of relatively inexpensive policies to choose from. For example, the House will soon pass a bill that may include an extension of transport-related spending, a tax credit for expanding company payrolls, and incentives for credit to small businesses. Some Senators have proposed a plan, at an estimated cost of $600 million, whereby the government could share employers’ labour costs temporarily in a bid to avoid layoffs. If a financial transactions tax is introduced to address the issue of excessive risk-taking by financial institutions, the additional revenue could be productively deployed via local government to create new jobs. Public services such as education would benefit from this type of support. Additionally, policies of the last one year are likely to begin producing results: literally thousands of job-creating projects financed by the $787 billion stimulus package are still in the pipeline. Even the flourish of fiscal dexterity may not, however, save President Obama from politically motivated accusations of profligacy, typically from conservative lobbies opposing big government. The President needs to hold his nerve and soldier on regardless, only ensuring that he is transparent in outlining his plans to those who stand to gain from them.
Even as the Obama administration pushes forward with its Af-Pak and healthcare reform policies this month, joblessness in United States will increasingly dominate the attention of the President, Congress and the ordinary Americans. Unemployment may have fallen marginally in November after touching a 26-year high of 10.2 per cent in the month before, but the Federal Reserve has projected that even with positive economic growth it will hover around 8.3-8.7 per cent during 2010. Over the coming months, President Obama will worry that four states that are all Democratic bastions — Michigan, Nevada, Rhode Island, and California — will see the highest rates of unemployment. He will have to also struggle with the limited room for manoeuvre in public finances implied by staggering levels of public debt and the overall budget deficit. Given the elevated spending commitments in the Af-Pak region and subsidies for the proposed healthcare reform, there is practically no fiscal leeway to tackle America’s jobless recovery through further stimulus-like measures.
Yet the deterioration in labour market conditions for middle-class Americans is an ominous threat to President Obama’s already-falling popularity. With the entire House of Representatives and a part of the Senate facing elections next year a decisive strategy to create jobs quickly has become imperative, even urgent. The government has a range of relatively inexpensive policies to choose from. For example, the House will soon pass a bill that may include an extension of transport-related spending, a tax credit for expanding company payrolls, and incentives for credit to small businesses. Some Senators have proposed a plan, at an estimated cost of $600 million, whereby the government could share employers’ labour costs temporarily in a bid to avoid layoffs. If a financial transactions tax is introduced to address the issue of excessive risk-taking by financial institutions, the additional revenue could be productively deployed via local government to create new jobs. Public services such as education would benefit from this type of support. Additionally, policies of the last one year are likely to begin producing results: literally thousands of job-creating projects financed by the $787 billion stimulus package are still in the pipeline. Even the flourish of fiscal dexterity may not, however, save President Obama from politically motivated accusations of profligacy, typically from conservative lobbies opposing big government. The President needs to hold his nerve and soldier on regardless, only ensuring that he is transparent in outlining his plans to those who stand to gain from them.
Labels: Af-Pak, economic downturn, Obama administration, recession, stimulus package, unemployment
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