Month: December 2011

Jobs outlook improving: ‘Hiring activity has picked up’

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Amid all the gloom and doom about unemployment, there are growing signs that things may actually be getting better.

The drop in weekly unemployment claims to 2008 levels is one of a handful of indicators that is pointing to a slightly improving employment picture.

A gain in small business hiring, a pickup in online job advertising and an increase in job openings all indicate things are getting better on the employment front though still far from the level of hiring needed to make a dent in unemployment.

Thursday`s weekly jobless claims report of 366,000 was the lowest reading since May, 2008, and the four-week moving average of 388,000 is the lowest since July, 2008. Economists warn claims can be volatile at this time of year, but the numbers nonetheless suggest improving employment gains.

“The claims combined with these better hiring indicators points to improvement in payroll growth,” said Goldman Sachs economist Andrew Tilton in a phone interview.

Tilton wrote in a note that the alternative job openings and hiring indicators he watches imply that “hiring activity has picked up to the best rate so far in the economic recovery, though it remains well below pre-crisis levels.”

The biggest risk to the improved hiring picture, and the economy, would be if Europe does not manage to contain its sovereign debt problem and it worsens. Some economists argue another risk would be if Congress does not extend the payroll tax cuts or the extended unemployment benefits, which are estimated to put a combined USD 160 billion into the economy.

“If you`re in an environment where corporate profits are still going up, we`ll probably see better jobs creation in the year ahead. The good news is at the same time we`re seeing fewer layoffs. We`re seeing commodities prices coming down. This is unusual to have both of these things happening at the same time,” said Gary Thayer, chief macro strategist at Wells Fargo Advisors.

“I`m very encouraged that next year, if we`re correct on our GDP forecast, that we`ll probably see better jobs numbers. It won`t be strong employment, but we`ll get some months where jobs will surprise on the upside,” said Thayer.

Thayer said he`s encouraged that hiring has been broad-based, though there was a high concentration of retail jobs in the November jobs report. That report showed the creation of 120,000 jobs, 50,000 of which were in retail. But he said over several months, there has been hiring across a range of industries. The unemployment rate also improved to 8.6 percent from 9 percent in November.

Tilton said the December jobs report could be roughly the same or slightly better than November, and one area that could show improvement is the construction sector. “I think that`s an area where you might see some improvement over time but from a low base,” he said. “We think house prices are near a bottom. We think construction levels are very low.”

The hiring indicators Tilton watches include the Manpower survey of hiring intentions, which at a positive 9, had its best reading since 2008 this week. The low was negative 2 during the crisis, but the all-time high was in late 2000 when it was at 25, and the average reading since 1975 is 15.

Also encouraging was the National Federation of Independent Business monthly survey this week that showed hiring intentions by small businesses doubled. The NFIB says that while still at weak levels, its employment indicators delivered a significant positive signal and that could mean the unemployment rate should improve a few tenths of a point if these readings continue and more job creation follows.

The NFIB reported that 14% of the owners it surveyed added an average of 3 workers over the past few months and 12% reduced their worforce by 2.9 workers. Forty-seven percent hired or tried to hire.

It said a seasonally adjusted net 7% of the business owners it surveyed plan to create new jobs over the next three months, up 4%, and the highest reading in 38 months.

“The small business survey was notably better. That`s generally been an area where things have been incredibly weak for a long time,” said Tilton.

He notes that online job advertising also perked up. When seasonably adjusted, Monster.com shows a pickup in online job advertising, and the Conference Board survey of online job advertising, which dropped during the summer, appears to have stabilized, he said.

The Labor Department`s Job Openings and Labor Turnover Survey, or JOLTS, released this week, shows an upward direction in the rate of job openings across the economy, Tilton says, but hiring rates have remained relatively steady.

The release of the survey Tuesday showed that the number of job openings in October was 3.3 million, nearly flat with the 3.4 million in September. That is 35% above the trough in July, 2009. At the same time, the number of hirings was 4 million in October. For perspective, this compares to a high of 5 million in December, 2007 and a trough of 3.6 million in October, 2009.

Tilton also watches consumer perception of jobs in the Conference Board`s confidence survey. That showed the share of consumers who see jobs as plentiful, minus the consumers who see jobs as “hard to get” was minus 36.3% but that was a seven point improvement from October and the best reading since 2009.

Disclaimer

Copyright 2011 cnbc.com

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Can retail bright spot make up for Europe gloom?

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

With one final shopping week to go, investors will be keeping their eye on the consumer to see how holiday sales shake out and what it might mean for the economy.

But first, Friday`s markets will be watching developments in Europe, and the release of US consumer inflation data, the only economic report of note.

Holiday sales seemed to be off to a good start after a mad dash to early sales on Black Friday weekend, but they`ve had some mixed reviews since then. The question now is whether they will beat expectations, like so many economic indicators have done lately.

The National Retail Federation Thursday raised its forecast for holiday sales, and now expects an increase of 3.8% to a record USD 469.1 billion. Its earlier forecast was for a 2.8% increase.

Macy`s chairman Terry Lundgren Thursday told “Mad Money” host Jim Cramer that his stores are doing great, even without the cold weather that drives big-ticket winter apparel sales.

“In our case, you don`t need cold weather to buy watches and shoes. We`re having one of the best years and back-to-back two years in a decade. Things are going very well and that`s without cold weather. A little cold weather would be an extra boost for us,” he said.

What to Watch

Investors are also following Congressional progress on legislation that would extend the payroll tax cut and keep the government running. Senate leaders Thursday were more optimistic that a compromise would be reached.

In Europe on Friday, the Italian parliament will hold a confidence vote on Prime Minister Mario Monti`s austerity plan.

“I think the chances are the confidence vote will pass and the austerity budget will go through. But we`re just marking time,” said Boris Schlossberg of GFT Forex.

“Although we had a better day in the euro zone credit markets, yields are far from their pre-crisis level. If yields don`t compress back to their pre-crisis levels, the mountain of additional debt service just to maintain European debt levels will offset any savings made by austerity. To me, that`s the big story they still have not resolved,” Schlossberg said.

US CPI is released at 8:30 am Friday and is expected to be unchanged.

Some US economic data Thursday was better than expected, including weekly jobless claims which came in at 366,000. The Philadelphia Fed survey showed a surprise increase to 10.3 in December, from November`s 3.6. The index, which measures regional manufacturing activity, contracted during the summer but has been rising for three months now.

US stocks finished higher, helped by the positive data. The lack of negatives out of Europe Thursday also allowed the euro to rebound slightly and regain the key 1.30 level.

The Dow was up 45 points at 11,868, and the SandP 500 gained 3 points to 1,215.

Wells Fargo Advisors chief macro strategist Gary Thayer said it`s possible stocks could move higher into the year end.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow