[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|
Status: Not Logged In; Sign In
Business Title: Business Hiring Calms Concerns About U.S. Fiscal Cliff Business hiring is holding up, allaying concerns about a U.S. economic downdraft in the face of a looming fiscal cliff. Companies added an average 121,000 workers a month in the third quarter, up from 88,000 in the second quarter, according to Labor Department figures released on Oct. 5. Total payrolls, including government, increased an average 146,000 a month, compared with 67,000 in the prior period. “We’re not seeing a further loss of momentum, and that’s a very important positive,” said Bruce Kasman, chief economist for JPMorgan Chase & Co. in New York. A pullback in business investment had fanned concerns that companies would begin to pare hiring in anticipation of $600 billion in government spending cuts and tax increases at the start of 2013. The Congressional Budget Office has warned the economy will fall into recession if Congress allows the fiscal squeeze to go ahead. The jobs numbers suggest the economy is expanding at a “trend-like pace” of around 2 percent, Kasman said. That would be in line with the 2.2 percent average quarterly growth rate of gross domestic product since the 18-month recession ended in June 2009. Job gains have averaged 146,000 a month so far this year, compared with the 153,000 average last year. In an effort to speed up the recovery, the Federal Reserve last month announced a third round of asset purchases and extended its horizon for near-zero interest rates at least through the middle of 2015. Arne Sorenson, president and chief executive officer of Marriott International Inc., described the outlook for business in the U.S. and Canada as “steady as she goes” in an Oct. 4 conference call with analysts. “We’re now sort of thinking 2-percent-ish GDP growth for next year,” said Sorenson, whose Bethesda, Maryland-based company is the largest publicly traded U.S. hotel chain. Confidence is growing at automakers, including General Motors Co., as cars and light trucks sell at the fastest pace in four years. “We continue to be encouraged by positive signs from the housing sector, lower jobless claims, higher consumer sentiment and higher consumer spending,” Kurt McNeil, GM’s vice president of U.S. sales, said on a conference call on Oct. 2. Toll Brothers Inc., the largest U.S. luxury-home builder, reported a better-than-estimated profit and an increase in revenue for its third quarter ended July 31. “Rising home prices have caused many homeowners to once again feel more comfortable with their net worth, which in turn fuels the economy’s expansion, which then spurs greater demand for housing,” Robert Toll, chairman of the Horsham, Pennsylvania-based company, said in an Aug. 22 conference call with analysts. Stocks fell today as European finance ministers prepared to meet to discuss the region’s debt crisis. The Standard & Poor’s 500 Index fell 0.3 percent to 1,456.67 at 10:56 a.m. in New York. The benchmark index increased 1.4 percent last week as U.S. economic reports topped estimates. Growth in developing East Asia, which excludes Japan and India, will probably ease to 7.2 percent this year from 8.3 percent in 2011, the Washington-based World Bank said in a report today. That is the slowest pace since 2001, according to World Bank data, and lower than a forecast in May of 7.6 percent. The biggest surprise in the U.S. jobs report for September was a drop in the unemployment rate to 7.8 percent, the lowest since January 2009, from 8.1 percent in August and 8.5 percent at the end of last year. The median forecast of 88 economists surveyed by Bloomberg prior to the report was for an 8.2 percent rate. No economist projected joblessness below 8 percent. Employment, as measured by a survey of households, expanded 873,000. During the last three months, it’s risen an average 186,000, not much different from the growth of payrolls reported by employers during that period. President Barack Obama used the jobs data to press home his message that the economy is on the mend after the worst recession since the Great Depression. “We’ve made too much progress to return to the policies that led to the crisis in the first place,” Obama said on Oct. 5 at a campaign rally in Fairfax, Virginia. His Republican challenger, Mitt Romney, said much of the decline in the jobless rate this year reflects discouraged workers abandoning their search. “When I’m president of the United States, that unemployment rate is going to come down, not because people are giving up and dropping out of the workforce, but because we’re creating more jobs,” the former Massachusetts governor told voters in Abingdon, Virginia, on Oct 5. That wasn’t the case in September, when employment as measured by the Labor Department’s household survey showed the biggest increase since June 1983, excluding the annual Census population adjustments. The winner of the Nov. 6 presidential election will have a big say in how the year-end fiscal squeeze will be handled, Andy Stern, former president of the Service Employees International Union, said at a Sept. 13 Bloomberg Markets conference in New York. Obama has said he wants to allow the scheduled tax increases on the wealthy. Romney opposes any rise in taxes. A group of senators already is quietly attempting to craft a bipartisan solution to the nation’s budget deficit, which has topped $1 trillion in each of the past four years. Lawmakers probably will agree to allow some, but not all, of the scheduled fiscal contraction to take place, said Philip Suttle, chief economist of the Institute of International Finance in Washington. The group, which represents more than 460 financial companies worldwide, forecasts the budget tightening next year will amount to about 1.7 percent of GDP. “Uncertainty around the fiscal cliff has already caused firms to postpone capital-goods orders,” Joshua Dennerlein, U.S. economist for Bank of America Corp. in New York, said in a note after the release of the jobs numbers. Shipments of nondefense capital equipment excluding airplanes, a proxy for business investment, fell 0.9 percent in August after decreasing 1.1 percent in July, according to Commerce Department figures. Dennerlein called the September jobs report “solid” while voicing doubts that it will be sustainable. “We continue to expect job growth to fade in the fourth quarter” as companies rein in hiring until they see what happens in Washington. JPMorgan’s Kasman, though, said he takes “comfort” from the employment report because it suggests that weakness in capital spending “is not broadening out” to hiring. A proxy for labor income that combines hours worked with wages grew around 2.5 percent in third quarter, about the same as in the second, he said. The “economy remains on a slow, but not slowing, growth path,” said Kathy Bostjancic, director of macroeconomic analysis for the Conference Board in New York.
Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 1.
#1. To: Brian S (#0)
Except that Labor Force Participation Rates are still falling And those Corporations are Not hiring. And jobs created the last 4 years are Part time, No bennies and low wage. " Let's next ask why the Central State and Central Bank should subsidize and bail out the mortgage industry, a major component of private banking. Once again we find losses are neatly distributed to the citizenry while the profits all flow to private hands. Given that 98% of all mortgages are backed or guaranteed by Federal agencies (Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA, FmHA, etc.), the mortgage market is already completely socialized: the taxpayers are on the hook for any and all losses, but the profits from originating and servicing the loans are all private. Meanwhile, 1 out of 6 FHA insured loans are are delinquent, and everyone who cares to examine the ledger knows the taxpayers will soon be bailing out FHA just as they did Fannie Mae and Freddie Mac." oftwominds, Ch Hughes Smith
There are no replies to Comment # 1. End Trace Mode for Comment # 1.
Top • Page Up • Full Thread • Page Down • Bottom/Latest |
|
[Home] [Headlines] [Latest Articles] [Latest Comments] [Post] [Mail] [Sign-in] [Setup] [Help] [Register]
|