Posted on 10/23/2003 5:35:12 AM PDT by Brian S
Oct. 23 (Bloomberg) -- The number of Americans filing for unemployment benefits last week matched the lowest in eight months, suggesting companies are retaining more workers as demand strengthens, a government report showed.
First-time jobless claims fell by 4,000 to 386,000 during the week ended Saturday from a revised 390,000 a week earlier, the Labor Department said in Washington. The four-week moving average, a less volatile measure, held at 392,250 for a second straight week.
Companies including United Parcel Service Inc. and 3M Co. are reporting increased demand, and economists estimate the economy grew at the fastest pace in almost four years during the third quarter. That may translate into hiring by year end, helping sustain consumer spending that has powered the recovery, some economists said.
``We have seen strengthening across all our customer base,'' said Scott Davis, chief financial officer of United Parcel Service, the world's largest package-delivery company. ``We will be hiring workers as the volume increases. There has been some of that going on, and I would anticipate more in later November into the holiday season.''
UPS, based in Atlanta, said Tuesday that third quarter profit rose 28 percent, exceeding its forecast, as shipments by manufacturers rose for the first time in three years.
Economists had estimated that claims last week rose to 385,000, based on the median of 41 projections in a Bloomberg News survey, from the originally reported 384,000 in the week before.
Last week's claims matched the total in the week ended Sept. 20, which was the lowest since 378,000 during the week ended Feb. 8.
Benefit Rolls Fall
Benefit applications averaged 402,530 between July 1 and Oct. 11, down from 419,270 in the first half of the year and a peak of 459,000 during the week ended April 19. Some economists consider 400,000 the dividing point between labor market expansion and contraction.
The number of people continuing to collect state unemployment insurance dropped by 84,000 in the week ended Oct. 11 to 3.542 million, the lowest since the same total in the week ended April 5.
The insured unemployment rate, which tends to move with the monthly jobless rate, fell to 2.8 percent in the week before last from 2.9 percent. During that week, 44 states and territories reported an increase in new claims and nine a decrease.
The economy may have expanded at a 6 percent annual rate in the third quarter, based on the median estimate of 52 economists in a Bloomberg News survey, after cash from tax refunds and mortgage refinancing helped boost consumer spending. Such a pace would be the fastest since 7.1 percent in the fourth quarter of 1999. The U.S. added 57,000 jobs in September, the first gain in payrolls in eight months.
Snow's Promise
``The missing piece of the puzzle in the recovery has been business investment, and that's coming on board now,'' said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. Moran made the remarks yesterday in a presentation at a National Association of Home Builders conference in Washington.
U.S. Treasury Secretary John W. Snow told the Times of London in an interview published Monday that he expects job growth to accelerate to about 200,000 new jobs a month.
``I would stake my reputation on employment growth happening before Christmas,'' Snow told the newspaper.
IBM, the world's biggest computer maker, based in Armonk, New York, said third-quarter profit rose 36 percent, helped by a 17 percent gain in services sales and the dollar's decline against other currencies. IBM plans to add 10,000 jobs worldwide next year.
Winnebago, 3M
Winnebago Industries Inc., the largest maker of motor homes by volume, is hiring more workers after sales improved toward the end of its fourth quarter, which concluded in August, Chief Executive Bruce Hertzke said Tuesday. The company is based in Forest City, Iowa.
3M, the maker of Scotch tape and medical inhalers, among other products, said third-quarter earnings increased 22 percent. The company, based in St. Paul, Minnesota, raised its 2003 profit forecast because of lower costs and higher sales.
3M Chairman and Chief Executive Officer James McNerney has eliminated 8,500 jobs and closed 11 plants since he took over in 2001.
``Many firms can meet sizable increases in demand without hiring new workers,'' Richmond Federal Reserve Bank President J. Alfred Broaddus Jr. said Monday in a speech at the Kiwanis Club of Richmond, Virginia. Broaddus said recent economic data increased his optimism about the sustainability of the current economic expansion.
Cost Cutting
Some economists have said efficiency gains may limit job creation. Companies have been trying to hold down costs because competition and unused production capacity in many industries have made it difficult to raise prices.
Cost cutting has contributed to the loss of 336,000 jobs this year, according to government payroll figures. Productivity, or the amount of work done in an hour, rose at a 6.8 percent annual rate in the second quarter, compared with an average annual increase of 2.5 percent from 1996 to 2000.
Kraft Foods Inc., the biggest U.S. foodmaker, is looking ``very aggressively'' at cutting costs, Co-Chief Executive Betsy Holden told investors on a conference call this week, without providing specifics. Kraft is based in Northfield, Illinois. A switch by consumers to rivals' cheaper brands led to Kraft's first profit decline in two years.
Ann Gurkin, a Davenport & Co. analyst, said in a report that the company probably will fire workers and reduce production as a result.
Merck & Co., the second-biggest U.S. drugmaker, plans to cut about 4,400 jobs after posting a drop in quarterly net income in part because sales of its top-selling Zocor cholesterol medicine fell. The company is based in Whitehouse Station, New Jersey.
Last Updated: October 23, 2003 08:30 EDT
If Daschle/Gephardt said that every 100 point fall in the Dow equaled one Dem House seat gain (or something to that effect back in 2004), is there a new equation that every 5,000 drop in jobless claims equals +1% in Bush's re-elect #s?
I think it's roughly every 0.1% drop in unemployment = 0.5% for Bush.
So if unemployment drops to 5%, and you figure it's a 50.5-49.5 Bush lead now with 6.1% unemployment, he'd win easily, 54-46.
It's also important to watch unemployment figures by state. Wisconsin, a key battleground, is at 5.7% and falling. Other battleground states:
Oregon: 8.0%
Washington: 7.6%
Michigan: 7.4%
Illinois: 7.1%
California: 6.4%
New Mexico: 6.1%
West Virginia & Ohio: 5.8%
Arizona: 5.6%
Missouri: 5.4%
Pennsylvania: 5.3%
Florida & Nevada: 5.2%
Minnesota & Iowa: 4.6%
I think Michigan and Illinois are a lost cause unless national unemployment improves dramatically, but Bush lost 'em both last time anyway. The Left Coast will be tough, even though Bush narrowly lost Oregon and Washington in 2000.
Minnesota, Iowa, and Pennsylvania look like solid pickups, along with a solid win in Florida.
Yes sir, the war of terror is going to hurt us as our enemy kicks us where it counts...the pocketbook.
China, Russia, mid-Easterns and others who have been propping up our debt, are going to un-prop it. We are about to witness much pain and panic.
Each one I called said the same thing ... they didn't need help and the have had to let go of their people because there is no work to be done right now.
I then talked to my friend who builds decks and docks to see if I could pound nails with him (bad knees and all) ... he said that he had a couple of job pending but they fell though cause people don't have the money to pay for the work right now. His power was turned off last night (no joke) cause he couldn't pay the bill. He's moving on to a delapideted house boat cause he can't pay his condo rent now ... lack of work.
My other friend (Gil) is a roofer and he was putting a roof on a neighbors house (by himself ... he's 51) two days ago. So my deck buddy (Dave) and I went over to see if he needed help. After all a job is a job. Gil said that he had to let all his workers go cause this was the last job he had booked ... and the first he had since Sept.
So Dave and I went over to a friends (Bill) house and ran into the coffee lady Sheryl. Sheryl had (HAD) a roadside coffee business, She would park a custom coffee serving trailer on the side of the major commute road and sell coffee to the commuters. She said she had to shut the business down because the traffic had dwindled to such a point that it wasn't worth the time and she was going to lose her house if she didn't get gainful employment. Bill was a mechanic at the Chevy dealership in Hayward ... he was laid off in Sept. Bill said that none of the dealerships that he applied at are hiring and most are laying off.
I personally have till the end of November until my house goes up for sale. The house next door, which is a mirror image of mine, took 11 months to sell.
So where is this "recovery" I keep hearing about ... cause it sure ain't here.
Unemployment varies by region. My friend runs a framing (house) company and he's been going like gangbusters. Several of my coworkers are looking for a new job and are fighting off companies who want to pay them $10k more than they make currently.
If you have skills and are willing/able to move, getting a job is not a problem, even now when the jobs picture is just starting to improve. If you don't have skills or are pigeonholed into one industry or city/region/state, you're going to have a much tougher time, obviously. That's nothing new.
Well it is not in CT either or any place where I talk to people. It had better start being felt soon or GWB will have problems in a little over 12 months.
But sure all my friends could move to NC and become framers ... there's 2 million of us high tech workers unemployed ... can your area support 2 million new (and generally totally in-experienced) framers ???
Oh and BTW I personally helped design the computers in most of the military aircraft that flew in both Iraq wars and I was on the design team that designed the computer in the Galileo space probe. So I guess were going to have to ask India and Red China for those computers for now on cause the all the experienced American engineers are in NC framing houses.
Lastly ... Seems to me the thanks I'm getting for all that high tech work is basically the same "thanks" I got when I returned from Vietnam
Hey, I have an idea, why don't you talk about all the roofing etc. projects you were looking for and then when I mention a housing guy whose business is booming you take it out of context and ignore the rest of my post?
Maybe you can't find a job because your thinking is insular and your people skills nonexistent. Try that on for size; nobody wants a self-centered jerk with an inflated ego on the team.
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