Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stock Market Bubble 2025 - 11th Feb 25
Fed Interest Rate Cut Probability - 11th Feb 25
Global Liquidity Prepares to Fire Bull Market Booster Rockets - 11th Feb 25
Stock Market Sentiment Speaks: A Long-Term Bear Market Is Simply Impossible Today - 11th Feb 25
A Stock Market Chart That’s Out of This World - 11th Feb 25
These Are The Banks The Fed Believes Will Fail - 11th Feb 25
S&P 500: Dangerous Fragility Near Record High - 11th Feb 25
Stocks, Bitcoin and Crypto Markets Get High on Donald Trump Pump - 10th Feb 25
Bitcoin Break Out, MSTR Rocket to the Moon! AI Tech Stocks Earnings Season - 10th Feb 25
Liquidity and Inflation - 10th Feb 25
Gold Stocks Valuation Anomaly - 10th Feb 25
Stocks, Bitcoin and Crypto's Under President Donald Pump - 8th Feb 25
Transition to a New Global Monetary System - 8th Feb 25
Betting On Outliers: Yuri Milner and the Art of the Power Law - 8th Feb 25
President Black Swan Slithers into the Year of the Snake, Chaos Rules! - 2nd Feb 25
Trump's Squid Game America, a Year of Black Swans and Bull Market Pumps - 24th Jan 25
Japan Interest Rate Hike - Black Swan Panic Event Incoming? - 23rd Jan 25
It's Five Nights at Freddy's Again! - 12th Jan 25
Squid Game Stock Market 2025 - 5th Jan 25

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stubbornly High Unemployment Shows U.S. Economy Still Plagued by Jobless Economic Recovery

Economics / US Economy Jun 04, 2010 - 06:15 AM GMT

By: Money_Morning

Economics

Best Financial Markets Analysis ArticleDon Miller writes: While a surge in corporate profits reflect an improving economy, several government reports show that the United States continues to be plagued by a lingering "jobless recovery."

Most analysts, including President Barack Obama, are predicting a strong May jobs report due out today (Friday) with more than 500,000 new jobs added to the U.S. economy.


"We expect to see strong jobs growth in Friday's report." Obama predicted in a speech in Pittsburg on Wednesday.

Still, the numbers are likely to be inflated due to temporary hiring by the U.S. government for the 2010 Census, and overall unemployment isn't expected to ease significantly.

Most economists expect the unemployment rate to stubbornly hover around 10%, reflecting the disparity between an overall economy that shows signs of solid growth and a job market that continues to struggle.

According to a national employment report published Thursday by payroll giant Automatic Data Processing Inc. (Nasdaq: ADP) and consultants Macroeconomic Advisers, private-sector jobs in the U.S. increased by 55,000 last month. Economists had expected ADP to report a job gain of 75,000 in May.

Separately, the number of U.S. workers filing new claims for unemployment benefits fell last week by more than expected, but not by enough to signal the job market is on the path to recovery.

The government said in its weekly report Thursday that initial claims for jobless benefits fell by 10,000 to 453,000 in the week ended May 29. Economists who were surveyed by Dow Jones Newswires had predicted claims would decrease by 5,000.

Despite this latest drop, the four-week moving average - which aims to smooth volatility in the data - rose by 1,750 to 459,000. Total claims lasting more than one week also rose.

"Claims would suggest the underlying state of the job market remains somewhat fragile," John Herrmann, senior fixed-income strategist at State Street Global Markets LLC in Boston told Bloomberg News. "There is a disconnect given the improvement we are seeing in economic growth."

The disconnect may have several sources, Richard Berner, co-head of global economics at Morgan Stanley & Co. in New York, wrote in a May 28 note.

One reason is the extension of benefits - up to 99 weeks in some states - raises the incentive to file. While half the claims are typically rejected, the jump in claims in March and April may reflect more ineligible filers.

An increase in filings by construction workers and by temporary government employees who are helping with the census may also be boosting claims, Berner wrote.

Another report released by the Labor Department earlier this week showed hundreds of metropolitan areas faced tougher job prospects in the month of April compared with one year ago. The unemployment rate was higher in 291 of the 372 metropolitan areas covered by the report.

Companies continued to cut costs at the start of the year even as the economic recovery gained momentum, meaning they got more from existing work forces.
Even though worker productivity figures for the first quarter were revised downwards yesterday, new Labor Department figures showed that efficiency climbed 6.1% over the past four quarters, the biggest 12-month gain in nine years.

At the same time, unit labor costs - a key gauge of where prices are heading - declined at a 1.3% pace, showing employers squeezed more from remaining staff to control expenses.

The productivity gains should help keep prices in check, allowing the Federal Reserve to keep short-term interest rates at or near zero to support the economy and give unemployment time to come down.

As the uneven economic recovery works its way through different segments of the business landscape, some companies are adding workers while others are shedding them.

Lowe's Cos. Inc. (NYSE: LOW), the second-largest U.S. home improvement retailer, said it is adding more than 1,400 positions for employees to visit customers' homes to sell them windows, doors and other products, and will fill those jobs internally and by taking on new employees.

Meanwhile, Palo Alto, California-based Hewlett-Packard Co. (NYSE: HPQ), the world's largest personal- computer maker, plans to eliminate about 9,000 jobs and retool its computer-services business. The Hershey Co. (NYSE: HSY), the 116-year-old chocolate maker based in Hershey, Pennsylvania, may cut 500 to 600 jobs from a historic plant that produces chocolate Kisses.

Source: http://moneymorning.com/2010/06/04/unemployment-jobless-recovery-2/

Money Morning/The Money Map Report

©2010 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in