– News of the day –
Mike: New claims for unemployment shot up last week. Why this increased number is considered unexpected is beyond me, since all data seem to point in claims rising dramatically:
WASHINGTON (AP) — New claims for unemployment benefits rose more than expected last week, the government said Wednesday, as layoffs spread throughout the economy, more evidence the labor market is weakening as the recession deepens.
The Labor Department reported that initial requests for jobless benefits rose to a seasonally adjusted 586,000 in the week ending Dec. 20, from an upwardly revised figure of 556,000 the previous week. That’s much more than the 560,000 economists had expected.
Mike: One of my gripes with unemployment reports from MSM is that they compare apples to oranges. The report following the graph gives the impression that unemployment isn’t too bad compared to other times, but it doesn’t bother to mention that the unemployment numbers were adjusted during the Clinton administration to omit discouraged workers, which could add significantly to the unemployment rate, as described by Shadow Government Statistics:
Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.
Mike: Here, from Shadow Government Statistics is a graph showing the various unemployment rate scenarios. As you can see, real unemployment is likely much higher than reported unemployment:
Mike: Now look at the following article and see how they describe unemployment rates without consideration of how those numbers are reported:
(Money Magazine) — Nervous about your job? Join the club. Recent polls show that 30% of Americans are worried about being laid off. Yet most of them won’t be.
– Economists expect the unemployment rate to hit 8% in 2009. That’s more than today’s 6.5%, but it’s no more than it was in the early ’90s and far lower than the rate in the not-so-distant recession of the early ’80s (11%). Why do today’s projections make you feel so scared?
Mike: As consumers cut back on spending they will buy less stuff, which leads companies and small businesses to reduce headcount. And since many companies are cutting back on overtime and benefits, along with lessened weekly hours, incomes are decreasing as well:
* WASHINGTON (Reuters) – U.S. consumers cut spending for a fifth straight month during November and their incomes shrank, according to a government report on Wednesday that pointed to deepening recessionary pressures.
The Commerce Department said spending contracted by 0.6 percent after falling even more steeply by 1 percent in October. Incomes contracted by 0.2 percent after a slight 0.1 percent gain in October, reflecting the strain that rising unemployment is putting on Americans’ ability to spend.
* As a rising number of Americans sign up for unemployment benefits, many of the state-funded trusts that pay them are on the decline.
– At least 12 of them are on the brink of insolvency. In 20 other states, the funds have lost value, even before the big job losses of the past two months. –
Mike: An interesting read follows. The Brits are more realistic in their financial expectations than the US MSM and talking heads:
* Let’s do the math
We have 1.2 million unemployed construction workers. We have 123,000 unemployed architects and engineers. We have 83,000 unemployed machinery workers. We have 145,000 unemployed transportation-related workers. So that brings us to barely more than 1.5 million of a labor pool the government can tap into for all the new building activity. But the bulk of the joblessness is in financials (up to half a million), retail/wholesale (1.2 million), leisure/hospitality (1.3 million) and health/education (1.2 million). And if investment bankers, shopkeepers, bell captains and medical chart technicians have anything in common it is that they don’t have much experience in shovel-ready activities.
Mike: The following Christmas poem can be completed at the link:
’Twas the night before Christmas, my shopping was done
I’d gotten great bargains, gee, aren’t low prices fun!
But less costly gifts are but small consolation
For my four-o-one K’s brutal devastation.
This year of o-eight ranks surely one of the worst!
It all started when the housing bubble did burst.
How could such a mess happen? And, who should we blame?
The fault lies with culprits far too many to name.
But my rhyme needs a villain, and for me that’s a cinch.
It’s none else but that vandal — the nasty old Grinch,
Who’d slinked into town for some real mischief making
And our long expansion he planned to be breaking.
From that first day on, he was brewing up trouble,
Aiming his sights first on the housing price bubble.
So the Grinch posed first as a home mortgage lender
His too easy loan terms sent some on a bender.
– Microsoft Rumors/News –
* Any cuts – thought to be Microsoft’s first in its 30-year history – would follow a hiring freeze and come after years of massive expansion, to try and grow a successful online services business. Head count has grown 28 per cent to 91,000 in just two years as it has hired individuals and bought companies like online ads shop aQuantive – Microsoft’s biggest acquisition at nearly $6bn. The payroll has expanded by 49 per cent since 2005, with increases across R&D, sales, marketing, and support.
* Analyst: Microsoft staff cuts would be “healthy” –
Responding to unsubstantiated rumors of possible Microsoft lay offs, Oppenheimer & Co. analyst Brad Reback wrote in a report Monday that lay offs at Microsoft would be “well-received” by Wall Street and “signal that profitability is more important than revenue growth during this very difficult time.”
* Microsoft Corp could very well be cutting jobs next month before it announces its fiscal year quarterly results. Insiders who work for the company say that things are looking grim while a few managers have leaked information about substantial workforce reductions on January 15, 2009.
– Housing –
Mike: Yesterday’s housing reports were worse than expected and that will result in continued shedding of housing related jobs. Housing number reviews are now available and I’ll post some of these here:
Calculated Risk has an excellent analysis with some descriptive graphs:
And here is an analysis of existing home turnover (not pretty), and NSA data showing the existing home sales plunge was worse than the headline number.
– International –
Mike: Life in Russia is bound to deteriorate quickly if oil remains at $40 a barrel and the world economy continues on it’s recessionary ways:
* NOVOKUZNETSK, Kemerovo Region — The working week, like the winter days in this Siberian city, has become shorter since the global financial crisis paralyzed its heavy industry. Paychecks have been cut by a third or more.
Novokuznetsk’s half a million residents, over 60 percent of whom depend on the steel, coal and aluminum industries, dare not contemplate the alternative — mass layoffs — as they struggle to repay bank loans taken out in more prosperous times.
“If nothing changes, we will come up against more serious consequences in February or March,” said Alla Semyonova, director of the city’s employment center. “People have not yet fully grasped what is happening here.”
* MOSCOW (AFP) — Russia and China issued stark warnings on Wednesday about the impact of the crisis on their recently booming economies in 2009, with Moscow saying the downturn could spark unrest in the streets.
Japan also approved a record-high budget aimed at avoiding the worst effects of the crisis and Germany prepared to pump billions of euros into the economy in a new rescue plan in a holiday season marred by a slew of economic bad news.
“We need to take unprecedented measures when in an extraordinary economic situation,” Japanese Prime Minister Taro Aso said at a news conference after his cabinet backed the 980-billion-dollar (700-billion-euro) budget.
Mike: A harbinger of things to come in the US workforce?
* Applied Materials to lay off 200 in Israel –
The layoffs are greater than had been expected.
Yaniv Magal24 Dec 08 16:48
Poor third quarter results by Applied Materials Inc. (Nasdaq: AMAT) has forced it to lay off staff, including at its Israeli subsidiary. Today, after weeks of speculation, assessments, and media reports, Applied Materials president and CEO Michael Splinter has announced measures that include 200 layoffs at Applied Materials Israel, more than had been expected.
* It is estimated that Hon Hai has over 400,000 employees worldwide. By this number, Hon Hai will cut 12,000 to 20,000 jobs around the world.
via Hon Hai To Cut 20,000 Staff Globally – ChinaTechNews.com – The Technology Source for the Latest Chinese News on Internet, Computers, Digital, Science, Electronics, Law, Security, Software, Web 2.0, Telecom, and Wireless Industries.
* DUBAI (AFP) — Up to 45 percent of the construction workforce in the United Arab Emirates could be laid off, with thousands already having lost their jobs due to the global financial crisis, a report said Wednesday.
– US and some Canada news –
* BAINBRIDGE, GA (WALB) – The number of jobless Georgians continues to grow.
The unemployment rate is especially high in one southwest Georgia county. The national rate is now 6.7-percent, up three points from last year.
– Georgia’s rate is 7.5, also up three points from last year.
Mike: The chip makers are going to be making some big cuts in 2009, especially if poor earnings are the rule:
* SAN FRANCISCO (Reuters) – Memory chip maker Micron Technology Inc on Tuesday posted a wider quarterly loss, worse than Wall Street predicted, as average selling prices for its memory products declined.
For the fiscal first-quarter ended December 4, the company said its net loss widened to $706 million, or 91 cents a share, compared with a loss of $262 million, or 34 cents a share, a year ago.
* Mayor Carty Finkbeiner is announcing city layoffs a day after an arbitrator ruled a plan to save Toledo money through one-day furloughs violates union contracts.
The mayor announced he’s appealing that ruling that says the city has to re-pay the 240 workers forced to take off the day before Thanksgiving without pay. But in the meantime, he’ll lay off many workers around the holidays and for a week in February.
– Macsteel –
* Gerdau Macsteel, a manufacturer of special bar quality (SBQ) products in Jackson, Mich., sent out Worker Adjustment and Retraining Notification (WARN) notices Monday to salaried and hourly employees of a plant shutdown and layoff that will go on indefinitely.
* The first day of winter vacation for Macsteel workers was anything but a relaxing start to their holiday.
“It made me sick. Everyone spent all those years working there, 35 years or so– they’re out of work too,” says Chuck Smiley, a nine-year veteran of the steel manufacturer.
News that 300 Macsteel employees would be indefinitely out of work come January 16th hung heavy on the shoulders of Tom Dybata, Kasey Heckaman and Smiley— men who feel lost for the time being.
* Whirlpool Corp. is closing its Jackson, Tenn., facility, shedding 510 jobs, according to documents released by the Tennessee Department of Labor and Workforce Development.
The move is part of a plan by Whirlpool (NYSE: WHR) to shrink its workforce by 5,000 workers in the next nine months.
* Citigroup – A massive job reduction plan announced by Citigroup last month will make landfall in San Antonio in February when 55 employees at a CitiFinancial Auto facility on Interstate 10 West is closed.
State work force officials reported Monday that Citigroup, CitiFinancial’s parent company, had scheduled the layoffs for the middle of February at a facility at 7550 Interstate 10 West. A letter submitted to the state by Citi said the facility would be closed.
Mike: Why can the Yankees sign three players for contracts totalling about $375 million? Because the fine people of New York state paid for the new $1 billion dollar City Stadium in Manhattan. San Diego and other cities may be finding that having a ball team can end up costing the municipality more revenue than it brings in, both financially and culturally. And now that cities need to cut costs, they need to weigh the value of publically funded sports teams vs. the value of libraries, parks, protective services and schools:
* “The pride and presence of a professional football team is far more important than 30 libraries.” Intelligent people laughed when former pro-football-team owner Art Modell made the comment. Now San Diego, painfully broke, is the butt of the joke. It is discussing closing libraries while its establishment lobbies for subsidies for a team owned by a billionaire who is in much better financial shape than the City.
Mike: Better a pay cut or a spot in the UE line? I bet most will volunteer to cut the paycheck:
* About 700 Agilent employees in Delaware will see pay cuts of up to 10 percent under cost-saving measures the company announced Monday.
But they are expected to be spared the layoffs that will take place elsewhere in the company.
Agilent plans to cut 500 full-time jobs and eliminate 300 temporary positions. The company has a total of 20,000 employees.
Mike: That $100 billion wasted could have been put to good work producing jobs at home:
* An unpublished federal report has concluded the US reconstruction effort in Iraq has been a $100 billion failure. It found that the rebuilding has not done much more than restore what was destroyed during the invasion and the looting that followed. We speak to journalist T. Christian Miller of the investigative website ProPublica, who obtained a copy of the report. [includes rush transcript]
* Tuesday was a sad day for more than 3,000 General Motors Corp. workers in Janesville, Wis., and Moraine, Ohio, as the auto giant ended production at SUV plants in each city.
As the last SUV rolled off the production line in Janesville at GM’s oldest plant, Karen Green promised herself she would keep her emotions in check.
* (NECN) – The Boston teacher’s union says hundreds of teachers could lose their jobs if the state follows through on expected cuts to fill a budget gap, according to the Boston Herald.
* AllianceBernstein is the latest firm to announce cutbacks, as the deepening financial crisis has cut into the firm’s profits. The $452 billion firm saw its assets under management decrease by approximately $30 billion, or 6.2%, in November 2008 alone. The layoffs will affect members of the investment staff as well as client services and marketing employees. The firm’s research staff, which the firm had steadily built up within the last few years, has been reduced by an estimated 8% to 10%.
* Quaker Chemical Corp. said it has cut 80 positions, mostly in North America and Europe, as it responds to a fall in the fortunes of customers in the steel and automotive markets.
* A corporate restructuring of Charter Communications will cut 75 jobs, the St. Louis Business Journal reported Tuesday.
* In a letter released to The Woonsocket Call, Menard said that if the unions do not make concessions, she will resort to layoffs. Union leaders said the mayor has threatened to eliminate the jobs of 45 firefighters and 30 police officers.
* Some employees at the Alabama Department of Archives and History have been told the department may be forced to layoff workers as a result of state budget cuts.
* COPIA, the cash-strapped wine and food institute in Napa, Calif., has closed its doors for good, after a bankruptcy filing on Dec. 1 and subsequent revelations that the nonprofit corporation could no longer meet operating expenses or service its debt.
Mike: Some good news for state workers in OK:
* OKLAHOMA CITY — Gov. Brad Henry said Monday that he doesn’t expect state employees to be furloughed or terminated over the next year or so.
* ATLANTA (Reuters) – Retailers can be expected to speed up a wave of store closures, restructurings and job cuts in the coming weeks, hoping to get a fresh start in early 2009 after more than a year of recession.
Many store chains have waited for the holiday shopping season to end before taking more aggressive steps, but will aim for more cost cutting by the close of their retail fiscal year in early January and throughout calendar 2009, economists and consultants said.
* Unable to pay rent at its Bothell, WA headquarters, stem cell company CellCyte Genetics announced that it will shut down operations. “We presently do not have sufficient cash to fund our operations, and have curtailed substantially all activities,” the company said in its quarterly report, according to the Seattle Times.
* Steel slowdown leads to 111 layoffs in New Castle
A New Castle plant that processes stainless steel has fired four salaried workers and will lay off 111 employees for as long as six months.
Pennsylvania-based ATI Allegheny Ludlum, a specialty metals maker, told the Indiana Department of Workforce Development that cutbacks at the Henry County rolled steel facility are necessary because of a reduction in orders.
* Denver-headquartered American National Bank laid off 62 employees across all of its 40 locations throughout Colorado and Wyoming, officials confirmed Tuesday.
About one-third, or 20, of the layoffs occurred in Western Colorado branch locations. The bank operates in Grand Junction, Fruita, Telluride and Aspen, among 15 branches this side of the Continental Divide.
* With another half-dozen layoffs last week, the Chicago Reader’s editorial staff is now less than half the size it was when the free weekly newspaper was acquired by Creative Loafing Inc. just 17 months ago.
* Blackhawk Learning Connection, a day-care center for children 6 weeks to 10 years old on the city’s near southeast side, had to make staff reductions and do some creative scheduling to make it through 2007, the first year in as long as most can remember that the agency failed to receive a United Way grant.
* About two dozen county employees were laid off for 2009 as a result of revenue shortfalls.
County commissioners approved a 2009 budget on Tuesday that is millions of dollars smaller than this year’s budget. The Daily Herald reported Wednesday that there had been no layoffs.
While the sheriff’s office — which makes up half of the county employees — managed to avoid layoffs, other departments were cut back.
COLUMBIA, Tenn. – A middle Tennessee company is laying off 125 employees just two days before Christmas.
The job cuts are happening at Johnson Controls Inc. in Columbia, Tenn.
* Now another Hancock County aluminum maker is also downsizing. Aleris International is laying off 32 workers from its plant in Lewisport effective January 5th.
“The national economy has finally hit us here at home too,” said Jack McCaslin, Hancock County Judge Executive. “Most of the time our industries are the type that can sustain a whole lot of downturn.”
* HANNIBAL, Mo. — A brake cables plant in northeast Missouri is closing by the end of the year.
A representative for DURA says the company plans to close a plant in Hannibal. Employees have been told the plant’s operations are moving to Mexico and Milan, Tenn. DURA has been gradually phasing out jobs at its Hannibal North plant since March.
* POCA, W.Va. — A 3M plant in Poca that employs 10 full-time workers as well as some contract workers will close in April.
“We told our employees in early December that the facility’s operations would be consolidated with our manufacturing facility in Guin, Ala.,” said Donna Fleming Runyon, a spokeswoman at 3M’s headquarters in St. Paul, Minn. “By consolidating, we expect to help us be more competitive and continue to provide excellent service to our customers.”
* Cadence Innovation, a Troy-based automotive supplier that has filed for Chapter 11 bankruptcy protection, is closing its Hillsdale plant.
The company has notified the Department of Labor and Economic Growth it is closing the plant at 29 Superior St. and laying off 133 workers. Employees also received a Worker Adjustment and Retraining Notification letter.
* One of the biggest employers in the Flathead Valley is planning to shut its doors.
We talked with company officials about the announced layoffs at Columbia Falls Aluminum Company, which came so close to Christmas.
Columbia Falls and the Flathead Valley were hit hard Tuesday with the news that about 200 jobs will be lost.
* ASHEBORO, N.C. — A North Carolina company is closing after 82 years of producing a hand-built rocking chair popularized by President John F. Kennedy, who used them in the White House.
The News & Record of Greensboro reported Wednesday that P&P Chair Co. of Asheboro has quit production. Owner Beth Page said her husband, the son of one of the founders, died last month and this seemed like the right time to wind down the business.
* GRENADA, Miss. — A newsprint mill in Grenada will shut down for a month in January.
The Grenada facility employs at least 200, officials say, working in four 12-hour shifts.
Christina Aguilera – The Christmas Song
– Hiring –
Mike: Let’s end today’s post with some good news:
* HIRING: BREWER (AP) — At a time when many employers are slowing production and cutting jobs, the Cianbro (CHIN’-broh) Corp.’s Eastern Manufacturing Facility in Brewer is adding workers as it builds modules for an oil refinery expansion in Texas.
* CLEVELAND CO., N.C. — Their website ultimateconcerts.com has its own buzz.
If they make good on their promise people in Cleveland County will consider them ultimate “jobs”, 2,835 jobs.
Freddie Douglas likes the thought of new jobs in Cleveland County, “As far as the economy around here, we need it.”
* AT&T Inc. today announced that AT&T Mobility and Consumer Markets will add nearly 75 new jobs in Vermont as a result of its completed acquisition of the Vermont assets of Rural Cellular Communications, a provider of rural and suburban wireless communications services doing business in Vermont under the Unicel brand.
Mike: And since this is supposed to be a joyful day, let’s hear some holiday cheer starting with The Boss:
Carol Of The Bells – Trans Siberian Orchestra
Loreena McKennitt- Good King Wenceslas
Mike: I want to wish all my readers a wonderful holiday. See you on Friday………..
A Wonderful Christmas Time – Paul McCartney
God Rest Ye Merry Gentlemen – BNL