The most recent jobs data is providing an extremely pessimistic outlook for the United States labor market. Recently released data shows the number of first-time jobless claims for unemployment insurance rose to its highest level since mid-December, despite forecasts by Wall Street economists who predicted the weekly report to show a decline in claims.
The Labor Department reported that for the week ended Jan. 30, initial jobless claims rose by 8,000 to 480,000; economists forecasted the number to drop to 455,000. Today’s report, in addition to the lukewarm numbers released yesterday by ADP and Challenger, Gray & Christmas, is increasing concern among the unemployed, investors and politicians that tomorrow’s nonfarm payrolls number could turn out to be a disaster.
Economists are forecasting a rise of 13,000 net new jobs for the month of January when the Labor Department releases its monthly jobs report tomorrow at 8:30 a.m. EST. The unemployment rate is expected to hold steady at 10%, but after today’s number, many are rethinking their forecast that the rate could unexpectedly jump as high as 10.2%.
“The pace of improvement has slowed significantly in the last two months,” said Anna Piretti, a senior economist at BNP Paribas in New York, to BusinessWeek magazine. “This points to downside risk for consumption and the rest of the economy.
Productivity is the name of the game these days, as employers push their employees to do more rather than hire. A measure of employee output per hour rose at a 6.2% annual rate, capping a 2.9% gain for all of 2009. This was the biggest one-year increase since 2003. Labor costs have dropped at a 4.4% pace in the fourth quarter of 2009 and fell 0.9% for the entire year, the biggest drop in seven years.
The continuing claims figure, which was also released this morning, shows the number was little changed at 4.6 million for the week ending Jan. 23. This number does not include the number of Americans receiving extended unemployment benefits under federal programs.
Adding to the anxiety in today’s report was detailed information about the number of people who’ve used up their traditional unemployment benefits and are now collecting extended payments had increased by about 242,000 to 5.86 million in the week ending Jan. 16. This does not bode well for those on extended unemployment leave and have added challenges in finding new work.
Adding insult to injury, Macy’s Inc, the second-largest U.S. department store chain, announced this morning that it will be eliminating 1,500 store-level positions effective March 6, two people close to the situation said to BusinessWeek. The retail giant is firing department managers and merchandising team managers, said the sources, who declined to be identified because the cuts haven’t been made public. Some other positions being eliminated are operation managers and full-time stock positions.
P.S. Have you heard of the “Back Mountain Covenant”? The fine print in this global energy agreement could allow you to collect yearly royalty checks… possibly as high as six figures EVERY year for at least 20 years. Learn how you can make millions investing in European natural gas.
Other Articles Related To This Topic:
