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  1. 2009.03.07 U.S. Unemployment Rate Jumps to 8.1 Percent by CEOinIRVINE
  2. 2008.10.14 Wall Street Roars, Dow Jumps 936 by CEOinIRVINE 1

 
People across the country search for jobs as, for the first time on record, all 50 states report increased unemployment

The nation's unemployment rate climbed above 8 percent last month and the economy shed 651,000 jobs, new data shows, further evidence of the deepening recession that has devastated the stock market and home prices and triggered the largest government recovery effort since the Great Depression.

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The Bureau of Labor Statistics said the jobless rate rose from 7.6 percent in January to 8.1 percent in February, the highest rate in more than 25 years. An estimated 12.5 million Americans were unemployed in February, the data show, an increase of 851,000 since January. More than 4.4 million people have lost their jobs since the recession began in December 2007, U.S. Labor Secretary Hilda Solis said.

The government revised sharply upward the number of jobs the economy lost in December and January, showing a staggering 1.99 million jobs disappearing in the past three months.

More jobs were lost in each of those months than in any single month since October 1949, when the country was just pulling out of a painful recession (economists say direct comparisons to that era are difficult, however, because of changes in the labor force).

December had the most job losses, according to the revised figures, with 681,000 -- significantly more than the previous estimate of 524,000. The number of jobs lost in January rose to 655,000, up from a prior estimate of 598,000. An additional 651,000 jobs disappeared last month, the government said, illustrating the profound challenges of launching an economic recovery as employers continue to slash payrolls in a desperate effort to control costs.

The unemployment rate has shot up 3.2 percent since the recession began and is higher now than at any time since December 1983. Nearly 3 million Americans have been unemployed for six months or more.

The Obama administration has moved to stifle the job losses, primarily by approving an ambitious fiscal stimulus plan designed to plow money back into the economy. But the allocation of the money is just beginning, and the full effect of the spending probably will not be seen for some time.

Speaking to a group of newly minted police officers in Columbus, Ohio this morning, President Obama said the expensive and broadly drawn plan to invest in government and private sector jobs and infrastructure is a necessary response to a deep and dire recession.

"So many of you have been watching jobs disappear since even before this recession began," Obama said. "That is not a future I accept for the United States of America . . .

"Throughout our history we have met every great challenge through bold action and big ideas. That's what has fueled a shared and lasting prosperity . . . We have a responsibility to ourselves and to our children to do it again."

In an e-mailed statement, Solis said the government would "continue to do whatever is necessary to break the destructive cycle of job loss in this country and put Americans back to work."

The U.S. stock market opened higher this morning, then fell slightly, after sustaining sharp losses yesterday., Asian markets fell overnight.

The February data showed profound losses in the professional and business services sector, with 180,000 jobs gone. Some 168,000 jobs were lost in the manufacturing industry, with most of the decline in the durable goods sector. There were 104,000 construction jobs lost as projects stalled due to the collapse of the real estate industry and the ongoing credit crisis. The financial sector shed 44,000 jobs, retail lost 40,000 jobs and the leisure and hospitality industry reported 33,000 fewer jobs. Job growth continued, however, in the health-care sector.

Analysts say the pace of job cuts is likely to remain brisk for at least a few more months, because the demand for goods and services seems likely to remain very low as more consumers find themselves out of work. According to newly released data, the nation's productivity, a measure of goods and services produced per hour, fell at the end of last year. That suggests that demand for goods has dropped even faster than employers have been shedding jobs. Those who have lost their jobs are not eager to open their wallets, analysts say, while many of those who remain employed are cutting back because of fears about job security.

The new jobless numbers show that blacks and Hispanics are unemployed at higher rates than the national average. About 13.4 percent of blacks and 10.9 percent of Hispanics were looking for work in February, compared with 12.6 percent of blacks and 9.7 percent of Hispanics in January. The unemployment rate for whites rose to 7.3 percent, up from 6.9 percent the previous month. An estimated 6.9 percent of Asians were unemployed in February, up from 6.2 percent in January.

The number of people working part time because they cannot find full-time employment rose by 767,000 in February to 8.6 million, the government said.

The unemployment rate does not reflect people who say they would like to work full-time, but can only find part-time jobs, or who would like to be working but have given up finding employment because of the depressed market. When those categories are added to the number of unemployed -- technically those people who are actively seeking but unable to find jobs -- the government's "labor underutilization" rate measures 14.8 percent, up from 13.9 percent last month and 9.5 percent a year ago.

The average length of the workweek remained at a relatively low 33.3 hours for the third consecutive month.




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Posted by CEOinIRVINE
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Wall Street Roars,

Dow Jumps 936



Following last week's brutal sell-off, U.S. stocks staged one of the biggest comebacks ever Monday as global central banks and governments moved over the weekend to shape a rescue plan for troubled banks and economies. Markets around the world also headed sharply higher.

"This, boys and girls, is what you call a relief rally in markets," wrote Paul Kedrosky in his blog Infectious Greed on Oct. 13. "There are some staggering numbers out there, especially from Germany, Hong Kong, and Brazil indices."

At the close Monday, the Dow Jones industrial average soared 936.42 points, or 11.08%, to 9,387.61 -- the biggest point gain ever. The S&P 500 index climbed 104.13 points, or 11.58%, to 1,003.35, boosted by shares of investment banking and brokerages and auto manufacturers. The Nasdaq composite index rose 194.74 points, or 11.81%, to 1,844.25.

  Biggest Point Gains in the Dow

Date Close Net Chg. % Chg.
10/13/2008 9,387.61 936.42 11.08%
3/16/2000 10,630.60 499.19 4.93
7/24/2002 8,191.29 488.95 6.35
9/30/2008 10,850.66 485.21 4.68
7/29/2002 8,711.88 447.49 5.41
3/18/2008 12,392.66 420.41 3.51
3/11/2008 12,156.81 416.66 3.55
9/18/2008 11,019.69 410.03 3.86
4/5/2001 9,918.05 402.63 4.23
4/18/2001 10,615.83 399.10 3.91

European equity indexes also rose sharply, with Germany's DAX index and Paris' CAC index jumping more than 11% and London's FTSE-100 index rising 8%. Many stock markets in Asia also surged overnight.

"This sort of move was more or less inevitable after the sorts of downbound moves we've seen, so long as nothing imploded over the weekend," Kedrosky wrote. "It will give rise to non-stop cries of "the bottom is in", which I don't believe."

U.S. Treasury futures skidded on Monday, indicating bond yields were rising in reaction to the central bank movements that appear to have relieved panic that prevailed last week. The cash bond market, U.S. banks and government offices were closed Monday for the Columbus Day holiday.

The dollar index was lower as the euro and pound sterling rallied on central banks' moves to inject huge amounts of cash into their banking systems. Gold futures were plunging on hedge fund selling. Oil futures were higher on hopes banking efforts will revive global economies and boost demand.

Governments across the world launched multi-billion dollar bailouts to shore up global banks. Britain called for a new Bretton Woods agreement to reshape the world financial system, according to Reuters. The slew of bank bailouts worth hundreds of billions of dollars were designed to stave off the world's worst financial crisis in nearly 80 years, accompanied by declining global economic growth and the threat of widespread recession.

"Only by global action can we fully restore the confidence that is needed and build the international financial order," said British Prime Minister Gordon Brown. He called on world leaders to create a new "financial architecture" to reflect the global reach of economics and banking, in much the same way that the current international economic system was set up at a conference in Bretton Woods, New Hampshire, in 1944.

After meetings of the G-7 and International Monetary Fund in Washington this past weekend, Western financial leaders sought to assure panicky bankers and money managers in no uncertain terms that all of the measures needed to halt a worldwide meltdown are in motion.

While short on the details many market analysts had hoped for, the broad brushstrokes of forceful, coordinated action by Western governments were unveiled: No more Lehman Brothers-like failures of major financial institutions will be allowed. All bank deposits will be guaranteed. The banking systems of the G-7 nations will be flooded with almost unlimited liquidity. And if all that fails, any other tool—regardless of how economically unorthodox—will be used if needed.

 

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