Job Losses Could Drown Stimulus

Tags

Economic Recovery Package, Economic Stimulus Plan, Economy, Employment, Jobless Claims, Lay off, Lay offs, RECESSION, Recovery Package

Last week I read a blog that boasted of 60 new jobs in the state of Michigan or somewhere.  Said blogger proclaimed that Obama’s stimulus plan was working.  Then I see Obama on the tube with 25 recruits patting himself on the back.

That brings it to a total of 85 jobs out of the 3 million that Obama promised upon deliverance of his stimulus plan.

My point being made, I’ll move on.

The U.S. unemployment rate is at its highest level since 1983, a whopping 8.1 percent, as reported Friday. There remains the possibility that by early summer, one in 10 Americans will be unemployed in spite of actively looking for work.

Hence, the Obama’s stimulus package is seriously being undermined here by the reality of Americans.  In the next year or so, 10.5 million more people will become unemployed.  How can Obama’s spendulous plan be good for Americans?

Analysts increasingly view the administration’s actions so far as insufficient given the scope of the problem. The stimulus package was designed to “save or create” 3.5 million jobs, according to the administration. But the nation has already lost 4.4 million jobs since the start of the recession. Many banks and other financial institutions, whose health is critical to the economy, are teetering, and the Treasury Department has yet to finalize the details of its plans to remove from their balance sheets the toxic assets dragging them down.

“It’s premature to say we need another stimulus, but the economy is performing much worse than when [the law] was signed, and the odds are increasing that we’ll need a bigger policy response,” said Mark Zandi of Moody’s Economy.com, who has advised Democratic lawmakers. “What we’ve learned is policy has been a step behind this whole downturn. It’s important to get a step ahead.”

The International Monetary Fund yesterday urged governments worldwide to consider additional fiscal stimulus, noting that the public sector must help prevent a collapse of confidence.

LINK

What has come out of this Democratic spending spree is that the Democrats finally getting long awaited funding for their special interest lobbyist connected projects, thereby emitting screams of joy from the lobbyists who have been hiding and waiting impatiently in the backrooms of the White House.  And to share in their joy, these lobbyists spread the joy by writing checks to their politician of the moment.

In the meantime, the people’s suffering continues.

US Businesses Cut 25,000 Jobs Every Day

Tags

Economy, Jobless Claims, Lay off, Lay offs, UNEMPLOYMENT

MarketWatch: US payrolls shed 651,000  

More than 25,000 US workers lost their job every day last month as unemployment continued to soar, leaving 8.1 per cent of Americans out of work.

Official figures, which one economist called “horrible”, showed that 651,000 jobs were lost in February, pushing the unemployment rate up to the highest level since 1983.

It also emerged that the number of job cuts in January was revised upwards to 655,000, while December’s payrolls losses were adjusted to 681,000 – the deepest decline since October 1949.

The US economy has lost 4.4 million jobs since the beginning of the slowdown, with more than half of these positions cut in the last four months alone.

During February, the number of people working forced into part-time work because their hours were cut back or because they were unable to find full-time work rose by 787,000 to 8.6 million.

But despite the gloomy figures, some analysts saw a glimmer of hope that the pace of job losses was easing. The Dow Jones industrial average rose by 36.72 points to 6,631.16.

Paul Ashworth, a US economist at Capital Economics, said: “Manufacturing employment fell by a more modest 168,000 last month, compared with 257,000 the month before. The drop in services payrolls was bigger, but at least the rate of decline in retail employment has moderated – suggesting that sales may be stabilising.”

There was a surprise as the figures showed that pay was still rising, at a monthly rate of 0.2 per cent, taking the annual rate of growth to 3.6 per cent.

But Mr Ashworth said that this trend was expected to reverse as companies continued to cut costs and labour became more cheaply available. “[Pay growth] is still defying gravity. However, with unemployment soaring we expect a sharp slowdown in earnings growth soon.”  

US businesses cut 25,000 jobs every day By Grainne Gilmore, TimesOnline.Uk, 03/06/09, http://business.timesonline.co.uk/tol/business/economics/article5858116.ece 

http://www.marketwatch.com/news/story/Payrolls-fall-651000-jobless-rate/story.aspx?guid=%7B3C16959C%2DFFFD%2D45BF%2D848F%2D9B36B187AB24%7D

It is simply amazing that with such dire news, the Obama team is whooping it up. Each time a member of his Administration speaks, they talk as if the stimulus package is working.  Upon further questioning from the media, they can only respond “Well, we extended unemployment benefits.”

Unemployed squeezed on health insurance

Tags

Employment, healthcare, Jobless Claims, UNEMPLOYMENT

Newly unemployed Americans will have to spend about 30 percent of their jobless benefits on average to pay for health insurance through their former employer, according to a new report.

And if they want coverage for their families, the report by Families USA says it will take more than 80 percent of their unemployment check.

Unemployment hit a 16-year high last month as another 524,000 jobs were cut. For all of 2008, government says the economy lost a net total of 2.6 million jobs.

When workers lose their jobs, they are usually eligible to maintain their health insurance coverage through their old employer if they pay the premiums, plus a 2 percent administrative fee. The benefit is referred to as COBRA insurance, because of the law that established it.

 

http://www.google.com/hostednews/ap/article/ALeqM5iht4zUWlUoeJ6LxaU8BnPIEhWtlwD95JP6800

U.S. JOBLESS BENEFITS PROGRAM SWELLS TO 4.6 Mil. / JOBLESS CLAIMS CRASH STATE’S UNEMPLOYMENT NETWORK

Tags

Economy, Employment, Jobless Claims, NYS, UNEMPLOYMENT

The number of Americans collecting unemployment benefits surged to a 26-year high as the labor market worsened in a yearlong recession.

Initial jobless claims unexpectedly fell by 24,000 to 467,000 in the week that ended Jan. 3, the lowest level in almost three months, the Labor Department said today in Washington. The total number of people getting benefits rose a week earlier to 4.6 million, the most since 1982.

While the government projects a surge in firings in late December and early January, job cuts may have come earlier last year as sinking sales and the worst credit conditions in seven decades forced companies such as General Motors Corp. and Chrysler LLC to pare costs. The claims report came as President- elect Barack Obama warned the U.S. risks sinking deeper into an economic crisis without a stimulus package of about $775 billion.

“The labor market is just hemorrhaging here,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, who correctly forecast claims would fall. “Just look at the continuing claims numbers, they give you a better idea of what is going on. Nobody can find work once they’re fired.”

Jobless claims were projected to rise to 545,000, according to the median projection of 35 economists in a Bloomberg News survey. Estimates ranged from 480,000 to 600,000. Claims in the prior week were revised to 491,000 from 492,000.

December Jobs

LINK

 

JOBLESS CLAIMS CRASH STATE’S UNEMPLOYMENT NETWORK

The problems occurred just weeks after New York reported that its private-sector job count fell by 23,500 from November to 7,219,700 in December.

The New York State Department of Labor’s technology collapsed Tuesday under the weight of the state’s jobless claims.

More than 10,000 calls and claims per hour poured into the unemployment insurance telephone claims center and the online claim site, overwhelming the system. Both shut down Tuesday morning. By the afternoon, the Department of Labor announced that it had fixed the automated phone system, as well as the Web site, so residents could once again report their claims.

Labor Commissioner Patricia Smith said that New York’s online unemployment claims system and the Department of Labor telephone number “experienced an unexpected but temporary shut down due to high volume of calls.”

New York experienced the extraordinary rise in claims Tuesday morning. The problems occurred just weeks after New York reported that its private-sector job count fell by 23,500 from November to 7,219,700 in December (seasonally adjusted). That represented the largest month-to-month drop since October 2001, when the state’s economy suffered a slowdown exacerbated by terrorist attacks. More than 1 million people were out of work.

In November 2008, the entire state recorded a 6.1% unemployment rate, which includes New York City, with a 6.3% unemployment rate and upstate with a 5.9% unemployment rate. The country’s unemployment rate was at 6.7% in November.

Those seeking unemployment benefits are required to report any earnings they may have received each week. They can do so by phone or through the Web site. Claimants have until Sunday to file claims for the current week, the Department of Labor said.

JOBLESS CLAIMS CRASH STATE’S UNEMPLOYMENT NETWORK, http://www.informationweek.com/news/infrastructure/management/showArticle.jhtml?articleID=212700938&subSection=Management

The State of New York some time ago converted their unemployment offices into job labor centers.  To apply for unemployment in NYS, you must do it over the phone or over the internet.  It can not be done in person.  This has always been an accident waiting to happen.

One has never truly experienced governmental red tape, until one has experienced it in New York.

WALL STREET’S FINAL ’08 TOLL: $6.9 TRILLION WIPED OUT

Tags

Economy, Fannie Mae, Freddie Mac, Great Depression, Housing Crisis, Jobless Claims, Lehman Brothers, Mortgage, Mortgages, NASDAQ, New York Mercantile, obama, OIL PRICES, RECESSION, Standard & Poor's, Stimulus Plan, Stock Market, Tax Cuts, Tax Hikes, The Dow, Treasury Department, UNEMPLOYMENT, Wall Street

After months of tortuous trading, Wall Street rang out its worst year since the Great Depression yesterday, leaving shareholders $6.9 trillion the poorer.

The losses in 2008 were so broad and deep that every sector in the Standard & Poor’s 500-stock index took a double-digit hit, and the financial sector lost more than half of its value. The Dow Jones industrial average, an index of 30 blue-chip stocks, and the S&P, a broader index watched by market professionals, were down 34 percent and 38 percent, respectively, their deepest losses since the 1930s. The tech-heavy Nasdaq composite index was down 41 percent, its worst year since the exchange was created in 1971.

Overseas, the year was just as dismal. In Germany, stocks were down 40 percent, in Japan, 42 percent, in Brazil, 41 percent. Taken together, all of the world’s stocks lost 48 percent last year.

The year ended with relatively positive economic news, though analysts said it will have limited impact. The Labor Department said jobless claims fell by 94,000 last week to a seasonally adjusted 492,000, a bigger drop than expected, but unemployment remains historically high. And rates for a 30-year, fixed-rate mortgage fell to 5.1 percent this week from 5.14 percent the week before — the lowest since Freddie Mac began tracking that data in 1971. But the housing market remains weak and home values have plummeted.

With the economy expected to sour further during the first half of the year and poor corporate earnings likely to pile up as businesses account for the losses from the financial crisis and housing downturn, a stock market recovery will be bumpy, analysts said.

It has traditionally taken about five years for stocks to recover from a “mega-meltdown,” said Sam Stovall, chief investment strategist for Standard & Poor’s Equity Research. If the S&P does not revisit the low levels it reached in November, it could gain 15 percent in 2009, making a dent in 2008’s losses, he said.

But “if we find the recession is deeper and longer than we currently expect, if there are more financial land mines that are unanticipated, there is no guarantee” stocks will not collapse again, Stovall said.

LINK

UNEMPLOYMENT CLAIMS AT A 26 YEAR HIGH

Tags

Economy, Jobless Claims, Lay off, Lay offs, RECESSION, UNEMPLOYMENT

The number of Americans filing first- time claims for unemployment insurance last week rose to a 26- year high, indicating employers are stepping up job cuts as the recession deepens.

Initial jobless claims increased more than forecast to 586,000, the most since November 1982, from a revised 556,000 the prior week, the Labor Department said today in Washington. The four-week moving average of claims, a less volatile measure, also was the highest since 1982.

Employers including automakers accelerated firings in the final months of 2008, and job losses for the year are forecast to exceed 2 million. The deteriorating labor market prompted President-elect Barack Obama this week to expand his economic stimulus goals and call for creating or saving 3 million jobs over the next two years.

”Claims at this level are consistent with huge losses in non-farm payrolls,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. ”We don’t think we’re going to get any sort of really good news for quite some time out of the labor market.”

Initial claims were projected to increase to 558,000, from an originally reported 554,000 the prior week, according to the median of 32 forecasts in a Bloomberg News survey. Estimates ranged from 535,000 to 595,000.

Four-Week Average

Along with the level of continuing claims, the four-week moving average signals job losses are accelerating. The average rose to 558,000 for the period ended Dec. 20, compared with 544,250 the prior week, which was the week the government surveys companies for its monthly employment report.

For the week ended Nov. 15, which was the survey period for November, the four-week average was 507,000. The number of people staying on benefit rolls fell to 4.37 million in the week ended Dec. 13 from 4.387 million.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.3 percent. The unemployment rate, continuing claims and the state claims figures are reported with a one-week lag.

Twelve states and territories reported an increase in new claims for the week ended Dec. 13, while 41 had a decrease.

Jobless claims reflect weekly firings and tend to rise as job growth — measured by the monthly payroll report — slows. The government is scheduled to release its December employment report on Jan. 9.

Economy Shrank

The weekly initial claims level has jumped by more than 200,000 since the beginning of the year, as the housing downturn spread into an overall global recession. The U.S. economy shrank at a 0.5 percent annual pace in the third quarter, the Commerce Department said yesterday.

The economy entered a recession in December 2007, the National Bureau of Economic Research announced Dec. 1. Economists surveyed by Bloomberg earlier this month projected gross domestic product would shrink this quarter by 4.3 percent, the biggest decline since 1982, and would continue contracting through the first half of 2009.

The Federal Reserve Dec. 16 cut its benchmark interest-rate target to as low as zero and said it will buy debt as the next step in combating the longest recession in a quarter-century and reviving credit. In the statement accompanying its decision, the Federal Open Market Committee said ”labor-market conditions have deteriorated.”

U.S. INITIAL JOBLESS CLAIMS ROSE 30,000 TO 586,000 LAST WEEK, Bloomberg News, 12/24/08 http://www.bloomberg.com/apps/news?pid=20601087&sid=aOhHZ.KaNUo4&refer=home#