Posts Tagged ‘unemployment rate’
Monday, June 13th, 2011
Sluggish job growth in May could be a sign that the economic recovery is losing momentum.According to the ADP May Employment Report, a mere 38,000 jobs were added in the private sector on a seasonally adjusted basis. That was well below consensus estimates of 170,000 new jobs. The report also revised downwards the estimated change from March to April from 179,000 to 177,000. “A deceleration in employment, while disappointing, is not entirely surprising,” the report said. “In the 1st quarter, GDP grew at only a 1.8 percent rate and only about 2¼ percent over the last four quarters. This is below most economists’ estimate of the economy’s potential growth rate and normally would be associated with very weak growth of employment.”
Patrick O’Keefe, director of economic research at J.H. Cohn, said that although some seasonal factors may have been at work in the recent claims data and in the ADP estimates, the report still disappointed. “We can put away our balloons and party hats today,” he said. “We expected a pull back in the rate of acceleration, instead we got deceleration. It appears that the general expansion has lost a bit of momentum and employment numbers, which were already lethargic, are slowing further.”
“This only adds fuel to the argument that the slowdown story is here in the U.S.,” said Tom Porcelli, chief economist at RBC Capital Markets. “I am fairly confident that people are going to be scaling back their estimates for nonfarm payrolls. While it is a good thing that small and medium-sized companies are adding payrolls, there is no doubt that the pace has slowed. This is exactly what we do not want when other significant data shows things are slowing down as well. Having said that, I still do not believe the Fed will initiate QE3.”
Writing in the National Journal, Jim Tankersley takes a more optimistic viewpoint. According to Tankersley, “Reality is a little more positive and a lot more complicated than that. Wall Street analysts are fairly united in their view that the recovery has entered a “soft patch,” just like it did last year, and that sooner or later, growth and job-creation are on track to pick up again. Several analysts and columnists have been reminding Americans that recoveries from financial crises can often feel like stop-and-go traffic on the freeway. For now, the economic brakes seem to be pumping. The 2010 slowdown flowed from worries over Europe’s sovereign debt crisis. This one is likely a combination of several factors. The spike in oil and food prices has spooked confidence — though consumers are still spending apace, dipping into their savings to keep up — and may be driving businesses to scale back hiring.”
On the MarketWatch website, Rex Nutting says that “If you recall that government employment is declining by almost that much every month, the ADP report implies only a very small increase in total employment. This is no way to get the unemployment rate down from nine percent. The economy has been buffeted by both natural and man-made forces. Extremely bad weather earlier in the year depressed activity, as did the surge in commodity prices, especially for energy and food. Then the Japanese earthquake and tsunami knocked out vital supply chains. Global economic growth, which had given a big boost to U.S. exporters, is slowing. Europe is dead in the water, so is Japan. The fast-growing developing nations such as China, India and Brazil are downshifting to avoid overheating. The strongest sector of the U.S. economy — manufacturing — is still growing, but the momentum is fading. The Institute for Supply Management’s closely watched diffusion index (Defined by Investopedia as “A measure of the breadth of a move in any of the Conference Boards Business Cycle Indicators (BCI), showing how many of an indicators components are moving together with the overall indicator index) plunged by 6.9 points to 53.5 percent in May, the largest one-month decline since 1984.
Companies may need to start hiring again as a new report from the Department of Labor is showing that the productivity of American workers slowed in the 1st quarter and labor costs rose as companies boosted employment to meet rising demand. The measure of employee output per hour increased at a 1.8 percent annual rate after a 2.9 percent gain in the prior three months, revised figures from the Labor Department showed today in Washington, D.C. Employee expenses climbed at a 0.7 percent rate after dropping 2.8 percent the prior quarter.
Productivity measures the amount of output per hour of work. A slowdown in growth is bad for the economy if it persists. But it can be good in the short term when unemployment is high because it can mean that companies are reaching the limits on how much extra output they can get from their existing work forces. Output grew 3.9 percent in 2010, the biggest increase since 2002. But many economists believe it will slow to 50 percent of that rate this year. The expectation is that companies will hire new workers to further boost output.
Tags: ADP, ADP’s May Employment Report, Brazil, China, Department of Labor, Federal Reserve, GDP, global economic growth, Government hiring, India, J. H. Cohn, Japanese earthquake and tsunami, job growth, MarketWatch, National Journal, Productivity, QE3, unemployment rate, Wall Street
Posted in Economics, General | No Comments »
Wednesday, April 13th, 2011
Americans’ confidence in having adequate money to retire on has hit a 20-year low, according to a survey by the Employee Benefits Research Institute (EBRI). “We’re getting the most pessimistic results we’ve ever seen,” said Jack VanDerhei, EBRI’s research director and the study’s co-author. “Those that are not well prepared are finally starting to get it. The bad news is they’re not really reacting to it yet,” VanDerhei said. “Hopefully this will be something that in the future will generate more savings. People were shell shocked to some extent by what was going on in 2008 and 2009,” said VanDerhei. “Many people wouldn’t even open their 401(k) statements when they came every quarter because they were too afraid to look.” Now these same people are determining if they have adequate money saved. This pessimism is despite the fact that the average balance of a 401(k) account rose to $71,500 at the end of 2010, an increase of approximately 11 percent when compared with 2009, according to Fidelity Investments.
Approximately 27 percent reported that they have little confidence about the amount of their retirement savings, an increase over the 22 percent reported last year. The increase was driven by people with less than $100,000 in savings, according to the report. The percentage of those with less than $25,000 in savings who lack confidence about having enough money in retirement soared to 43 percent in 2011, an increase from the 19 percent reported in 2007. Five percent reported that their savings totaled more than $100,000, about the same as 2007. Nearly 1,000 workers and 250 retirees aged 25 and older were interviewed for the survey. EBRI has conducted the survey since 1990.
High unemployment rates, the size of the federal deficit, rising healthcare costs, lower returns on investment and worries about Social Security and Medicare funding have forced Americans to redefine retirement, VanDerhei said. Regulators and legislators are examining the risk of Americans outliving their savings as life expectancies increase and funds have shifted from traditional pension plans to defined-contribution plans such as 401(k)s. The Labor Department is examining whether it should be easier for employers to add annuities to retirement accounts. Senator Jeff Bingaman (D-NM) re-introduced legislation that would require 401(k) plan sponsors to inform workers of the projected monthly income they can expect at retirement based on their current account balance.
Not all the news in the EBRI study is bad. “In the past, investors in general were clueless about how big of a nest egg it takes to accomplish their goals,” said Harold Evensky, a Coral Gables, FL, financial planner. “The silver lining of going through a bad economy is that people are substantially more realistic about what they need to do.” Although the majority of people have not yet made major changes, at least 62 percent say it is possible for them to save $25 a week for retirement. One expectation may need to be adjusted. Among the 1,004 workers surveyed, 74 percent plan to work in retirement to supplement their savings, but just 23 percent of the 254 retirees surveyed say they have worked in retirement.
Tools are available online to help Americans saving for retirement determine how far they are on the road to financial stability. Generally speaking, financial planners suggest putting away between 11 and 15 percent of each paycheck for retirement. Additionally, the Department of Labor’s website has a section called “Top 10 Ways to Prepare for Retirement”.
Tags: 401k, deficit, Employees Benefit Research Institute, Fidelity Investments, Government deficit, Healthcare costs, Labor Department, Life expectancies, Medicare, Nest eggs, retirement, Savings, Senator Jeff Bingaman, social security, unemployment rate
Posted in Economics, General | No Comments »
Monday, February 21st, 2011
Federal Reserve Chairman Ben Bernanke is knocking heads with Representative Paul Ryan (R-WI), the new chairman of the House Budget Committee, about how to best control inflation while buying billions of dollars worth of Treasury bonds to build up the economy in a process called quantitative easing 2 (QE2). As the nation’s debt climbs to an unprecedented high level, President Obama is in the difficult position of having to forge an agreement with Congress on how high the legal cap on how much money the government can borrow will be. The Republicans who now control Congress say they will consent to an increase in the cap only if President Obama agrees to make significant budget cuts. Ryan has been an outspoken opponent of the Fed’s stimulus policy, which is pumping $600 billion into the economy through purchases of long-term Treasuries. He is concerned that the policy will accelerate inflation, create asset bubbles and reduce the dollar’s value. “My concern is that the cost of the Fed’s current monetary policy…will come to outweigh the perceived benefits,” Ryan said. “We are already witnessing a sharp rise in a variety of key global commodities and basic material prices.”
Bernanke disagreed, saying “The inflation is taking place in emerging markets because that’s where the growth is.” In the United States, he said, “overall inflation is still quite low and longer-term inflation expectations have remained stable.” Bernanke pointed to growth in economies like China, India and Brazil as the real cause of rising prices.
Speaking in a different venue, Treasury Secretary Timothy Geithner expressed confidence that Congress ultimately will raise the debt limit. “I can say this with complete confidence – that the U.S. will meet its obligations, that Congress will act as it always has to make sure we meet those obligations,” Geithner said. “There’s always a little political theater around this.”
Democrats and Republicans remain sharply divided on the issue. “It would be reckless from an economic and financial perspective…to essentially default on our debts and question the creditworthiness and full faith and credit of the United States, correct?” asked Representative Chris Van Hollen (D-MD) “Wouldn’t significant reductions or addressing the short-term spending aspect be good for the market and economy?” asked Representative Scott Garrett (R-NJ).
Representative Ron Paul (R-TX) and a Libertarian characterized Bernanke’s testimony as “cocky”. Paul, a 2008 presidential candidate who is a long-term critic of the Federal Reserve, now has a platform to air his views, thanks to the Republicans winning control of the House. As chairman of the House Domestic Monetary Policy and Technology Subcommittee, Paul called the hearing to examine the impact of the Fed’s policies on job creation and the unemployment rate. Paul has advocated for measures that would review the Federal Reserve or even eliminate it. Additionally, Paul slammed the Fed’s latest $600 billion bond-buying program, saying it and near-zero interest rates haven’t led to job creation in the United States.
Tags: Ben Bernanke, Capitol Hill, congress, Corporate tax rates, economic recovery, Federal Reserve, House Budget Committee, House Domestic Monetary Policy and Technology Subcommittee, inflation, Libertarian, Long-term Treasuries, monetary policy, President Barack Obama, Quantitative easing, Representative Chris Van Hollen, Representative Chris Van Hollen (D-MD), Representative Paul Ryan, Representative Ron Paul, Representative Scott Garrett, Republican-led House, Timothy Geithner, Treasury Department, unemployment rate
Posted in Economics, Financing, General, Green, Office, Residential | No Comments »
Wednesday, December 22nd, 2010
With the U.S. unemployment rate rising to 9.8 percent in November, the Department of Labor is concerned that economic recovery isn’t progressing as quickly as it would prefer. For the 19th consecutive month, unemployment has stayed above nine percent — the longest streak on record, beating out previous highs in the 1980s. Despite optimistic predictions that the nation would add 150,000 jobs in November, just 39,000 new jobs were added during the month, bringing unemployment up from 9.6 percent to 9.8 percent.
The Federal Reserve has decided to stay the course, saying the “economic recovery is continuing, though at a rate that has been insufficient to bring down unemployment.” Worries about steady high unemployment were the main motivation behind the Fed’s decision to launch a second round of economic stimulus in November with a new bond-buying program. Progress on reducing unemployment has been “disappointingly slow,” according to the Fed.
The persistent level of high unemployment shows that many Americans are still suffering, even though the National Bureau of Economic Research says the recession officially ended in June 2009. The economy lost more than eight million jobs during the recession. “To anyone around the dinner table, it means little,” says Lawrence Mishel, president of the liberal Economic Policy Institute. “The fact is, unemployment is going to remain flat for a year.”
“With the jobless rate stuck at 9.8 percent, the economy needs all the help it can get,” said Sung Won Sohn, economist at California State University. Because nearly 40 percent of the unemployed have been jobless for more than six months, there is growing fear that the cause may be more profound than the deepest recession in more than 70 years.
Tags: Austan Goolsbee, Ben Bernanke, Bush-era tax cuts, California State University, congress, deficit, Department of Labor, Economic Policy Institute, economic stimulus, Eric Cantor, Federal Reserve, house of representatives, Incomes, National Bureau of Economic Research, President Barack Obama, recession, unemployment rate
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Tuesday, July 27th, 2010
Commercial real estate is currently experiencing a perfect storm, one that will utterly change the way corporations utilize their office space in the future. This is the opinion of John Vivadelli, CEO and founder of AgilQuest Corporation and a well respected industry expert in the fields of alternative office environments; real estate metrics and cost management; and business continuity.
Prior to founding AgilQuest, Vivadelli was instrumental in developing IBM’s workplace management system in the 1990s to support the company’s transformational workforce mobility program, creating their “office of the future”. This new workplace strategy resulted in reconfiguring the technology giant’s real estate footprint by shedding millions of square feet that saved hundreds of millions of dollars annually. AgilQuest provides the services and systems necessary for companies and governments to achieve similar results.
According to Vivadelli, this perfect storm is impacting both the supply and demand sides of commercial real estate.
On the supply side, the United States has approximately 12.5 billion sq. ft. of commercial office space, which carry an estimated $1.2 to $1.4 billion in loans that will come due in the next two years. Many of these loans will not qualify under new reserve requirements. While the average base vacancy rate is currently 17 percent nationally; that statistic does not include shadow space – square feet that are paid for but not occupied – which adds another 5 to 20% to the overall vacancy rate. Additionally, with the upcoming implementation of FASB Rule 13, both owned and leased properties will have to be reported on corporations’ balance sheets. Off-balance-sheet leasing will no longer be an option.
On the demand side, he sees a fundamental shift downward in real estate absorption. The nation’s unemployment rate is approximately 10 percent, with an additional seven percent who have opted out of looking for a job. Some of these jobs will never return. Add to that the number of workers who perform their jobs remotely and stay connected to the office via PDA, cell phone and laptop, and the average actual occupancy rate between 8 a.m. and 5 p.m. is between 30 and 50%. That means over half of all office space across Corporate America is vacant on any given day. Considering that an average of $60 is allocated per sq.ft., that adds up to $360 billion that companies are paying to landlords for office space that is empty and they don’t need. This wastes 1.5 quads of energy and results in 40 million metric tons of unnecessary carbon released every year. As companies recognize the scale of the problem, the real estate industry will see a profound shift in how we use space.
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Tags: AgilQuest, balance sheet, commercial real estate, IBM, John Vivadelli, synthetic leases, unemployment rate, vacancy rates
Posted in Development, General, Industrial, Office, Residential | 1 Comment »
Thursday, April 15th, 2010
The United States economy is entering an era of sustainable growth as companies begin hiring again. That’s the opinion of Treasury Secretary Timothy Geithner, who said “I think the economy is definitely getting stronger. We’ve made a lot of progress, we’ve got some work to do still and it’s going to take some time to heal the damage.”
With the news that 162,000 jobs were created in March – the biggest uptick in three years – Geithner believes that the economic recovery is expanding. The March numbers include 48,000 temporary workers hired by the government to work on the 2010 Census, as well as increases in manufacturing and healthcare. Private payrolls climbed by 123,000 in March. The Obama administration is emphasizing the change in the labor market because the economy shed 779,000 jobs in January of 2009, the month the president was inaugurated.
Christina Romer, head of the Obama administration’s Council of Economic Advisors, cautioned that while the report is “the most positive jobs report we have had in three years, there will likely be bumps in the road ahead.” Alan Krueger, Geithner’s chief economist, sees private-sector hiring as a “healthy sign” that the economic recovery is gaining long-anticipated momentum.
Tags: Alan Kruger, census, Christina Romer, economic recovery, President Barack Obama, Timothy Geithner, Treasury Department, unemployment rate
Posted in Economics, General | No Comments »
Tuesday, March 23rd, 2010
A combination of limited supply growth and anticipated stabilization of the jobs market could mean that office rents may return to positive growth sooner rather than later. That’s the opinion of Victor Calanog, a researcher at Reis, Inc., one of the nation’s leading providers of commercial real estate performance information and analysis.
According to Calanog, “Office properties took the brunt of the recession last year, with rents falling at record rates. Effective rents cratered by 8.9 percent, the largest decline on record in almost 30 years of Reis history. Hidden amidst the devastation were signs that office occupancies were faring better than other property sectors. While multifamily and retail vacancies were hitting highs unseen in two decades or more, the national office vacancy rate was 17 percent at the end of 2009, the highest level since 2004.”
The percentage of office properties that had reduced their rents hit 86 percent in the 4th quarter of 2009. Calanog predicts that office rents in Washington, D.C., could be higher than those in Manhattan by the end of 2010.
The good news is that recent labor market figures are encouraging, with the unemployment rate holding steady at just under 10 percent nationally. Wall Street firms have started hiring again and job losses in New York were not as dire as predicted. “Unexpected events can derail this recovery, and economic growth is expected to be fragile for the near term, but as more positive news emerges we may be on track to seeing rents grow as early as next year,” Calanog said. “If this is the case, transaction volume and prices may pick up quickly to capitalize on the next upswing.”
Tags: Great Recession, Manhattan, office market, Reis Inc, rental rates, unemployment rate, Victor Calanog, Wall Street, Washington DC
Posted in Development, Office | No Comments »
Monday, March 1st, 2010
Arizona, Georgia and Texas are the growth centers in terms of new residents in the last few years, according to an Associated Press analysis of Internal Revenue Service migration data. The IRS compared the states where taxpayers filed their returns from 2007 to 2008 to arrive at their conclusions.
Texas led the nation, with 62,827 new households; the largest number of families moved there from California and overseas. Georgia ranked second, with 37,559 new households, many of whom moved there primarily from Florida and New York. Arizona reported a net gain of 20,300 new households, with the majority relocating there from California and Michigan.
The IRS statistics indicate that Americans are not moving much at present, with the annual migration rate at 11.9 percent – the lowest number in decades. United States Census Bureau estimates released at the end of 2009 confirm the IRS numbers. According to the AP analysis, counties with better-educated taxpayers typically see the highest county-to-county migration gains.
“People who move tend to be younger and have lower incomes,” according to William Frey, a demographer with the Brookings Institution. “Normally, if there is a big influx of young people, that could pull down the income of an area; and if there is a big outflux of young people, that can raise income in an area.”
Tags: Arizona, Associated Press Economic Stress Index, bankruptcy, Brookings Institution, demographics, Georgia, Internal Revenue Service, Migration, recession, Texas, unemployment rate, United States Census Bureau
Posted in Development, Industrial, Office, Residential | No Comments »
Tuesday, September 29th, 2009
The long recession has dramatically impacted the lives of all Americans, according to demographic data released by the U.S. Census Bureau. Commutes are lengthier; people are not moving; immigration is down; and couples are delaying marriage. The annual American Community Survey report, based on information gleaned from three million households, highlights how deeply the recession impacted all Americans.
The number of people who drive solo to work fell last year to 75.5 percent, the lowest in a decade. Yet, the average commute time rose to 25.5 minutes, as people left home earlier in the morning to pick up car-pooling co-workers. Mobility is at a 60-year low, which will impact congressional district reapportionment based on 2010 census data. The number of foreign-born individuals living in the United States fell to less than 38 million, after reaching an all-time high in 2007.
Of Americans over the age of 15, 31.2 percent reported that they had never been married, the highest percentage in a decade. According to the survey, the number of unmarried Americans started climbing when the housing market downturn started in 2006. Sociologists believe that young people are taking more time to achieve economic independence because they are having trouble landing well-paying jobs or are studying for advanced degrees.
“The recession has affected everybody in one way or another as families use lots of different strategies to cope with a new economic reality,” according to Mark Mather, associate vice president of the not-for-profit Population Reference Bureau. “Job loss – or the potential for job loss – also leads to feelings of economic insecurity and can create social tension.” With unemployment still rising, Mather notes that “It’s just the tip of the iceberg.”
Tags: Census Bureau, economy, housing market, immigration, job insecurity, recession, unemployment rate
Posted in Economics, General | No Comments »
Monday, September 21st, 2009
On the first anniversary of the collapse of Lehman Brothers and the onset of the global financial crisis, President Barack Obama used a Wall Street speech to call for stringent new regulation of United States markets. After Lehman’s collapse, the American government infused billions of dollars into the financial system and took major stakes in Wall Street’s most famous names. Although this action stabilized the system, it could not forestall a shrinking economy or the highest unemployment rate in 26 years.
“We can be confident that the storms of the past two years are beginning to break,” he said. As the economy begins a “return to normalcy,” Obama said, “normalcy cannot lead to complacency.”
Lobbyists, lawmakers and even regulators so far have opposed proposals to more closely monitor the financial system. The five biggest banks – Goldman Sachs, JP Morgan, Wells Fargo, Citigroup and Bank of America – posted second-quarter 2009 profits totaling $13 billion. That is more than twice their profits in the second quarter of 2008 and nearly two-thirds as much as the $20.7 billion they earned in the same timeframe two years ago – a time when the economy was considered strong.
Connecticut Senator Christopher Dodd, chairman of the Senate Banking Committee, is the point man for formulating new rules. President Obama wants stricter capital requirements for banks to prevent them from purchasing exotic financial products without keeping adequate cash on hand. It was precisely this type of behavior that caused last year’s financial crisis.
Tags: Bank of America, banks, Citigroup, economy, financial system, global financial crisis, Goldman, JP Morgan, lawmakers, Lehman Brothers, lobbyists, President Obama, Senate Banking Committee, unemployment rate, Wall Street, Wells Fargo
Posted in Economics | No Comments »