From the Associated Press:
DETROIT (AP) -- Once the very symbol of American industrial might, Detroit became the biggest U.S. city to file for bankruptcy Thursday, its finances ravaged and its neighborhoods hollowed out by a long, slow decline in population and auto manufacturing.
The filing, which had been feared for months, put the city on an uncertain course that could mean laying off municipal employees, selling off assets, raising fees and scaling back basic services such as trash collection and snow plowing, which have already been slashed....
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Link: http://hosted.ap.org/dynamic/stories/U/US_DETROIT_BANKRUPTCY
Thursday, July 18, 2013
Monday, July 15, 2013
Economy dangerously close to contraction
From MarketWatch.com:
U.S. economic growth has again slowed sharply, skidding dangerously close in the second quarter to an outright contraction in gross domestic product.
Following the releases Monday of tepid reports on retail sales and inventory accumulation, forecasters marked down their GDP expectations from 1.4% to 1.1%. It’s probable that U.S. GDP rose less than 2% for the third quarter in a row, and it’s possible that growth was less than 1% for the second quarter in the last three....
But we thought that the household sector was holding up a little better. The surprise Monday was that U.S. consumers were more cautious as well. Retail sales rose 0.4% in June, with most of the growth coming from automobile sales. Most retailers reported weak sales for the month....
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Link: http://www.marketwatch.com/story/economy-skids-dangerously-close-to-contraction-2013-07-15
U.S. economic growth has again slowed sharply, skidding dangerously close in the second quarter to an outright contraction in gross domestic product.
Following the releases Monday of tepid reports on retail sales and inventory accumulation, forecasters marked down their GDP expectations from 1.4% to 1.1%. It’s probable that U.S. GDP rose less than 2% for the third quarter in a row, and it’s possible that growth was less than 1% for the second quarter in the last three....
But we thought that the household sector was holding up a little better. The surprise Monday was that U.S. consumers were more cautious as well. Retail sales rose 0.4% in June, with most of the growth coming from automobile sales. Most retailers reported weak sales for the month....
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Link: http://www.marketwatch.com/story/economy-skids-dangerously-close-to-contraction-2013-07-15
Sunday, July 14, 2013
Key Statistic of the Year
From the WSJ.com:
For the entire U.S. workforce, employers have added far more part-time employees in 2013—averaging 93,000 a month, seasonally adjusted—than full-time workers, which have averaged 22,000.
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Link: see next story
For the entire U.S. workforce, employers have added far more part-time employees in 2013—averaging 93,000 a month, seasonally adjusted—than full-time workers, which have averaged 22,000.
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Link: see next story
WSJ: Restaurant Jobs - Sorry, Just Part-Time
From the WSJ.com:
Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law.
He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce.
Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012.
In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800.
Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month...
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Link: http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html
Ken Adams has been turning to more part-time workers at his 10 Subway sandwich shops in Michigan to avoid possibly incurring higher health-care costs under the new federal insurance law.
He added approximately 25 part-time workers in May and June as he reduced some employees' hours and replaced other workers who left. The move showed how efforts by some restaurant owners and other businesses to remake their workforces because of the Affordable Care Act may be turning the country's labor market into a more part-time workforce.
Restaurants and bars have been adding an average of 50,000 jobs monthly since April—about double the rate from 2012.
In June, they added a seasonally adjusted 51,700 jobs, up from May's 47,900 tally, but below April's 51,800.
Overall, leisure-and-hospitality establishments hired more workers than any other industry in June, accounting for 75,000 of the 195,000 jobs added last month...
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Link: http://online.wsj.com/article/SB10001424127887324694904578601922653718606.html
Friday, July 12, 2013
Poverty rarely mentioned by president
From James Rosen at Foxnews.com:
...Barack Obama partly used his 2008 nomination acceptance speech in Denver to showcase a subject he has mostly seen fit, ever since, to avoid. "We are more compassionate," he said back then, "than a government that lets veterans sleep on our streets and families slide into poverty."
But since then, the poverty rate has increased: from 13.1 percent in 2008 to 15.1 percent in the most recent measurements released by the U.S. Census Bureau. And while he is widely seen as an ally of those Democratic constituencies most apt to focus on the plight of the underclass, Obama has actually mentioned the poor less frequently than any of his modern predecessors in the Oval Office.
A new study by Georgetown University's Center for Applied Research in the Apostolate, a non-profit center whose social scientists study issues of concern to Catholics, tabulated all references to an economic class that have appeared in the public papers of each president dating back to John F. Kennedy, the nation's first -- and to date only -- Catholic president.
The study found that Lyndon B. Johnson, architect of the 1960s "War on Poverty," was most apt, among the modern presidents, to mention the poor in some form or fashion: 84 percent of the time he made reference to any economic class. Kennedy and Jimmy Carter came next, with both mentioning the underclass approximately three-quarters of the time. Presidents Ford, Reagan, and George W. Bush all rated in the mid-to-high 60s, with Richard Nixon and Bill Clinton not far behind. George Herbert Walker Bush, the study found, was apt to speak about the poor fully half the time.
Only then -- dead last in the Georgetown rankings -- comes Barack Obama, who mentions the nation's least well-off only 26 percent of the time....
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Link: http://www.foxnews.com/politics/2013/07/12/obama-avoids-discussing-poverty-study-finds/
...Barack Obama partly used his 2008 nomination acceptance speech in Denver to showcase a subject he has mostly seen fit, ever since, to avoid. "We are more compassionate," he said back then, "than a government that lets veterans sleep on our streets and families slide into poverty."
But since then, the poverty rate has increased: from 13.1 percent in 2008 to 15.1 percent in the most recent measurements released by the U.S. Census Bureau. And while he is widely seen as an ally of those Democratic constituencies most apt to focus on the plight of the underclass, Obama has actually mentioned the poor less frequently than any of his modern predecessors in the Oval Office.
A new study by Georgetown University's Center for Applied Research in the Apostolate, a non-profit center whose social scientists study issues of concern to Catholics, tabulated all references to an economic class that have appeared in the public papers of each president dating back to John F. Kennedy, the nation's first -- and to date only -- Catholic president.
The study found that Lyndon B. Johnson, architect of the 1960s "War on Poverty," was most apt, among the modern presidents, to mention the poor in some form or fashion: 84 percent of the time he made reference to any economic class. Kennedy and Jimmy Carter came next, with both mentioning the underclass approximately three-quarters of the time. Presidents Ford, Reagan, and George W. Bush all rated in the mid-to-high 60s, with Richard Nixon and Bill Clinton not far behind. George Herbert Walker Bush, the study found, was apt to speak about the poor fully half the time.
Only then -- dead last in the Georgetown rankings -- comes Barack Obama, who mentions the nation's least well-off only 26 percent of the time....
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Link: http://www.foxnews.com/politics/2013/07/12/obama-avoids-discussing-poverty-study-finds/
The Economic Blunders Behind the Arab Revolutions
From the Wall Street Journal online:
....Half a century of socialist mismanagement has left the two Arab states [Egypt and Syria] unable to meet the basic needs of their people, with economies so damaged that they may be past the point of recovery in our lifetimes.
This is the crucial background to understanding the state failure in Egypt and civil war in Syria. It may not be within America's power to reverse their free falls; the best scenario for the U.S. is to manage the chaos as best it can.
Of Egypt's 90 million people, 70% live on the land. Yet the country produces barely half of Egyptians' total caloric consumption. The poorer half of the population survives on subsidized food imports that stretch a budget deficit close to a sixth of the country's GDP, about double the ratio in Greece...
Egyptians are ill-prepared for the modern world economy.
Forty-five percent are illiterate.
Nearly all married Egyptian women suffer genital mutilation.
One-third of marriages are between cousins, a hallmark of tribal society.
Only half of the 51 million Egyptians between the ages of 15 and 64 are counted in the government's measure of the labor force.
If Egypt counted its people the way the U.S. does, its unemployment rate would be well over 40% instead of the official 13% rate.
Nearly one-third of college-age Egyptians register for university but only half graduate, and few who do are qualified for employment in the 21st century.
That is the tragic outcome of 60 years of economic policies designed for political control rather than productivity....
----
Link: http://online.wsj.com/article/SB10001424127887323740804578597502771627238.html
....Half a century of socialist mismanagement has left the two Arab states [Egypt and Syria] unable to meet the basic needs of their people, with economies so damaged that they may be past the point of recovery in our lifetimes.
This is the crucial background to understanding the state failure in Egypt and civil war in Syria. It may not be within America's power to reverse their free falls; the best scenario for the U.S. is to manage the chaos as best it can.
Of Egypt's 90 million people, 70% live on the land. Yet the country produces barely half of Egyptians' total caloric consumption. The poorer half of the population survives on subsidized food imports that stretch a budget deficit close to a sixth of the country's GDP, about double the ratio in Greece...
Egyptians are ill-prepared for the modern world economy.
Forty-five percent are illiterate.
Nearly all married Egyptian women suffer genital mutilation.
One-third of marriages are between cousins, a hallmark of tribal society.
Only half of the 51 million Egyptians between the ages of 15 and 64 are counted in the government's measure of the labor force.
If Egypt counted its people the way the U.S. does, its unemployment rate would be well over 40% instead of the official 13% rate.
Nearly one-third of college-age Egyptians register for university but only half graduate, and few who do are qualified for employment in the 21st century.
That is the tragic outcome of 60 years of economic policies designed for political control rather than productivity....
----
Link: http://online.wsj.com/article/SB10001424127887323740804578597502771627238.html
Saturday, July 6, 2013
Jobs - just not well paying jobs
From Felix Salmon at Reuters.com:
America is creating jobs — but they’re not well-paid jobs, and they don’t seem to be going to the previously unemployed.
Today’s headline figure is certainly impressive: 195,000 new jobs were created in June, in the wake of a super-strong 207,000 new jobs in May. But the headline unemployment rate went nowhere, stuck at 7.6%, while the broadest measure of underemployment, the U6 unemployment rate, saw a worrying and substantial rise, to 14.3% from 13.8%.
Good jobs, like those in government, continue to get cut, while most of the jobs growth came in the most low-wage sectors, like hospitality. And while the data on wages was pretty healthy, remember that wage data applies overwhelmingly to people who have been employed for some time, rather than to people newly entering the workforce.
Basically, if you’re employed, you’re doing OK, but if you’re underemployed, the options available to you — the new jobs being created — are pretty underwhelming. Partly as a result, the number of discouraged workers — people who have given up looking for work because they can find nothing available — has gone up, sharply, to more than 1 million....
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Link: http://blogs.reuters.com/felix-salmon/2013/07/05/when-the-government-outsources-employment-policy/
America is creating jobs — but they’re not well-paid jobs, and they don’t seem to be going to the previously unemployed.
Today’s headline figure is certainly impressive: 195,000 new jobs were created in June, in the wake of a super-strong 207,000 new jobs in May. But the headline unemployment rate went nowhere, stuck at 7.6%, while the broadest measure of underemployment, the U6 unemployment rate, saw a worrying and substantial rise, to 14.3% from 13.8%.
Good jobs, like those in government, continue to get cut, while most of the jobs growth came in the most low-wage sectors, like hospitality. And while the data on wages was pretty healthy, remember that wage data applies overwhelmingly to people who have been employed for some time, rather than to people newly entering the workforce.
Basically, if you’re employed, you’re doing OK, but if you’re underemployed, the options available to you — the new jobs being created — are pretty underwhelming. Partly as a result, the number of discouraged workers — people who have given up looking for work because they can find nothing available — has gone up, sharply, to more than 1 million....
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Link: http://blogs.reuters.com/felix-salmon/2013/07/05/when-the-government-outsources-employment-policy/
Obamacare Strikes: Part-Time Jobs Surge To All Time High; Full-Time Jobs Plunge By 240,000
From Zero Hedge.com:
As a reminder: jobs have quantity and quality components.
The quantity component was good enough to convince the 10 Year [Treasury Bond] the taper is imminent (if not stocks, which continue to trade dislocated from any and all fundamentals).
But how about the quality? In a word: not good.
In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 - an all time record high.
Full time jobs? Down 240,000. And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.
And there is your jobs "quality" leading to today's market euphoria (if only for now)....
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Link: http://www.zerohedge.com/news/2013-07-05/obamacare-strikes-part-time-jobs-surge-all-time-high-full-time-jobs-plunge-240000
As a reminder: jobs have quantity and quality components.
The quantity component was good enough to convince the 10 Year [Treasury Bond] the taper is imminent (if not stocks, which continue to trade dislocated from any and all fundamentals).
But how about the quality? In a word: not good.
In June, the household survey reported that part-time jobs soared by 360,000 to 28,059,000 - an all time record high.
Full time jobs? Down 240,000. And looking back at the entire year, so far in 2013, just 130K Full-Time Jobs have been added, offset by a whopping 557K Part-Time jobs.
And there is your jobs "quality" leading to today's market euphoria (if only for now)....
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Link: http://www.zerohedge.com/news/2013-07-05/obamacare-strikes-part-time-jobs-surge-all-time-high-full-time-jobs-plunge-240000
Black Unemployment Rate Rose in June to 13.7 Percent
From BET.com:
The African-American unemployment rate rose from 13.5 percent in May to 13.7 percent in June, according to figures released by the U.S. Labor Department....
Bob Johnson, chairman of the RLJ Companies and founder of Black Entertainment Television, continued to call on the private sector to do its part to decrease the African-American unemployment rate, which is nearly double the national rate.
“Demographic trends clearly indicate that minorities are quickly becoming the largest employee pool and consumer base in the United States and with this, corporate America should view diversity as a business imperative, no less important than financial performance, succession planning and shareholder relations," Johnson told BET.com. "I am encouraging companies to voluntarily adopt a policy that I call the RLJ Rule, which, if implemented properly, is designed to further enhance a company’s already established commitment to diversity and inclusion.”
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Link: http://www.bet.com/news/national/2013/07/05/june-black-unemployment-report.html
The African-American unemployment rate rose from 13.5 percent in May to 13.7 percent in June, according to figures released by the U.S. Labor Department....
Bob Johnson, chairman of the RLJ Companies and founder of Black Entertainment Television, continued to call on the private sector to do its part to decrease the African-American unemployment rate, which is nearly double the national rate.
“Demographic trends clearly indicate that minorities are quickly becoming the largest employee pool and consumer base in the United States and with this, corporate America should view diversity as a business imperative, no less important than financial performance, succession planning and shareholder relations," Johnson told BET.com. "I am encouraging companies to voluntarily adopt a policy that I call the RLJ Rule, which, if implemented properly, is designed to further enhance a company’s already established commitment to diversity and inclusion.”
----
Link: http://www.bet.com/news/national/2013/07/05/june-black-unemployment-report.html
More Hamburger Flippers in Obama Economy
More from the WSJ.com:
Would you like fries with that jobs report?
Restaurants and bars account for nearly one of every 10 American jobs. They have driven a disproportionate share of employment growth over the past three months, accounting for more than a fourth of all new payroll spots.
The latest gains have been especially strong, with June seeing the fastest year-over-year growth in restaurant jobs in nearly 18 years, according to the Labor Department's employment report released Friday.
The boost in restaurant hiring reflects a strengthening in consumer spending as more Americans choose to eat out.
It is also a sign of where the economy is adding many of its new jobs: lower-paying, lower-skilled roles....
----
Link: http://online.wsj.com/article/SB10001424127887324260204578588023984664786.html
Would you like fries with that jobs report?
Restaurants and bars account for nearly one of every 10 American jobs. They have driven a disproportionate share of employment growth over the past three months, accounting for more than a fourth of all new payroll spots.
The latest gains have been especially strong, with June seeing the fastest year-over-year growth in restaurant jobs in nearly 18 years, according to the Labor Department's employment report released Friday.
The boost in restaurant hiring reflects a strengthening in consumer spending as more Americans choose to eat out.
It is also a sign of where the economy is adding many of its new jobs: lower-paying, lower-skilled roles....
----
Link: http://online.wsj.com/article/SB10001424127887324260204578588023984664786.html
What about looking deeper into the jobs report?
From James Pethokoukis at the American Enterprise Institute:
June Jobs: An employment report only a central banker could love
1. The economy lost 240,000 full-time workers last month, according to the more volatile household survey, while gaining 360,000 part-time workers. In other words, the entire increase in the household measure of employment was accounted for by persons working part-time for economic reasons. The underemployment rate surged to 14.3% from 13.8%.
2. Does Obamacare explain the poor jobs mix? From the econ team at First Trust:
Given the volatility in these data series, we would not put too much emphasis on one month’s worth of data. However, it’s consistent with the large payroll gains for retail as well as restaurants & bars and probably shows some firms who would be hiring full-timers are hiring part-timers to avoid Obamacare.
3. Part-time America: There are 28 million part-time workers in the US today vs. 25 million before the Great Recession. There are 116 million full-time workers in the US today vs. 122 million before the Great Recession. In other words, 19% of the (smaller) US workforce is part time vs. 17% before the Great Recession
4. Some context: Even at 195,000 jobs a month, the US would not, according to Brookings, return to pre-Great Recession employment levels until 2021. The “jobs gap” remains huge.
5. If the labor force participation rate were back to prerecession levels, the unemployment rate would be 11.1%. And even accounting for America’s aging, the U-3 rate would be roughly 9.1%, according to Goldman Sachs.
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Link: http://www.aei-ideas.org/2013/07/june-jobs-an-employment-report-only-a-central-banker-could-love/
June Jobs: An employment report only a central banker could love
1. The economy lost 240,000 full-time workers last month, according to the more volatile household survey, while gaining 360,000 part-time workers. In other words, the entire increase in the household measure of employment was accounted for by persons working part-time for economic reasons. The underemployment rate surged to 14.3% from 13.8%.
2. Does Obamacare explain the poor jobs mix? From the econ team at First Trust:
Given the volatility in these data series, we would not put too much emphasis on one month’s worth of data. However, it’s consistent with the large payroll gains for retail as well as restaurants & bars and probably shows some firms who would be hiring full-timers are hiring part-timers to avoid Obamacare.
3. Part-time America: There are 28 million part-time workers in the US today vs. 25 million before the Great Recession. There are 116 million full-time workers in the US today vs. 122 million before the Great Recession. In other words, 19% of the (smaller) US workforce is part time vs. 17% before the Great Recession
4. Some context: Even at 195,000 jobs a month, the US would not, according to Brookings, return to pre-Great Recession employment levels until 2021. The “jobs gap” remains huge.
5. If the labor force participation rate were back to prerecession levels, the unemployment rate would be 11.1%. And even accounting for America’s aging, the U-3 rate would be roughly 9.1%, according to Goldman Sachs.
----
Link: http://www.aei-ideas.org/2013/07/june-jobs-an-employment-report-only-a-central-banker-could-love/
U.S. Employers Added More Workers in June Than Forecast
Bloomberg.com:
Payrolls rose by 195,000 workers for a second month, the Labor Department reported today in Washington, exceeding the 165,000 gain projected by economists in a Bloomberg survey. The jobless rate stayed at 7.6 percent, close to a four-year low.
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Link: http://www.bloomberg.com/news/2013-07-05/payrolls-in-u-s-increased-195-000-in-june-unemployment-7-6
Payrolls rose by 195,000 workers for a second month, the Labor Department reported today in Washington, exceeding the 165,000 gain projected by economists in a Bloomberg survey. The jobless rate stayed at 7.6 percent, close to a four-year low.
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Link: http://www.bloomberg.com/news/2013-07-05/payrolls-in-u-s-increased-195-000-in-june-unemployment-7-6
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