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Hiring Slows in August, Adding to Pressure on Fed and Obama

The economy added 96,000 jobs in August, the Labor Department said Friday.

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Job growth slowed substantially in August, increasing the political pressure on the White House and strengthening the argument for new action by Federal Reserve policy makers to stimulate the economy when they meet next week.

The economy added a total of 96,000 jobs in August, down from a revised figure of 141,000 in July and well below the 125,000 level economists had been expecting.

The latest figures confirm suspicions that the economy has been treading water recently — over the last six months, monthly job growth has averaged 97,000, typically not enough to absorb new entrants into the labor force, let alone reduce the unemployment rate.

For August, the jobless rate fell to 8.1 percent, from 8.3 percent in July, but economists said that was a sign more unemployed workers were dropping out of the work force, rather than an indication that new jobs were being created.

Current and former members of the military at a job fair on Thursday in San Diego.

Republicans have made persistently high unemployment a centerpiece of their argument for denying President Obama a second term, and the new figures give the White House little to boast about.

“This is one of those reports that as you dig deeper, it looks less friendly,” said Ethan Harris, co-head of global economics at Bank of America Merrill Lynch. “The improvement in the rate was purely due to people who gave up looking for jobs.”

Indeed, he noted that the government report showed the overall labor force dropped by 368,000 workers in August.

“Politically, you can spin the drop in the rate as a positive, but it’s a sign of weakness,” Mr. Harris said. “The economy is slowing down and it wasn’t very robust to begin with.”

Ben S. Bernanke, the chairman of the Federal Reserve, last week delivered a forceful argument for more action, calling the current unemployment level a “grave concern.”

The Federal Reserve’s Open Market Committee convenes on Wednesday and Thursday, and many economists and traders are looking for major news to come out of the meeting. Some expect the Fed to announce another round of asset purchases aimed at lowering borrowing costs and boosting investments. A more limited option would be for the Fed to extend its benchmark interest rate, set near zero, into 2015 from late 2014.

The rate of job creation has been erratic in 2012. After adding more than 200,000 jobs in both January and February, the economy slowed and by June the gain totaled an anemic 80,000. It bounced back in July, but few economists see big gains in the coming months.

Friday’s report showed that the private sector created a total of 103,000 jobs in August, while the number of government jobs fell by 7,000.

In order to make a significant dent in the unemployment rate, the economy would have to add at least 200,000 jobs a month, assuming modest growth in the labor force.

The manufacturing sector, a closely watched barometer for the broader economy, lost 15,000 jobs.

Sectors that did show growth in employment tended to be lower-paying ones, said Mark Vitner, a senior economist with Wells Fargo. About 40 percent of the new jobs came from four sectors: retail, leisure and hospitality, temporary help services, and home health care services.

“This is one of the reasons wages haven’t been growing,” he said. “People are taking jobs they didn’t take in the past, moving from sectors like construction into jobs at lower-paying, big-box retailers.”

There were other signs the economy remained stuck in low gear. Average hourly earnings ticked downward by 1 cent in August to $23.52 while the length of the typical private sector workweek remained flat at 34.4 hours. Both measures have barely budged from where they were six months ago.

Hiring Slows in August, Adding to Pressure on Fed and Obama

 

Where the jobs are

It’s still a tough job market, but these 25 counties can make it a lot easier to find work and a great place to live.

1. Loudoun County, VA

Loudoun County, VA

Towns include: Ashburn

Job growth (2000-2011): 83.6%

 

Got data? Loudoun County does. Lots of it. With its expansive fiber networks and a swarm of tech workers, it’s a major traffic hub on the East Coast.

Major employers include Verizon Business and AOL, but the latest boom to hit this pocket of Northern Virginia’s high-tech economy? Data centers, which now occupy 4.3 million square feet in the county, earning Loudoun the nickname “Data Center Alley.”

2. Fort Bend County, TX

Fort Bend County, TX

Towns include: Sugar LandMissouri City

Job growth (2000-2011): 78.1%

 

Fort Bend County has come a long way from its farming days. Now it’s better known for growing jobs than for growing crops.

A favorable tax structure, strong school system and easy access to Houston make the county a triple threat when it comes to attracting — and keeping businesses. Engineering firm Fluor Enterprises, a major employer, is buying new land for a facility that is expected to add 2,000 jobs when completed.

3. Williamson County, TX

Williamson County, TX

Towns include: Cedar Park,GeorgetownRound Rock

Job growth (2000-2011): 73.8%

 

Central Texas’ Williamson County hits the bull’s eye when it comes to offering incentives for big business. Corporate tax breaks and low property taxes have attracted the likes of top-flight companies such as Dell, which employs 13,000 at its headquarters in Round Rock.

The rapid development of nearby Austin has spurred the growth of so-called “super suburbs” like Williamson County’s Round Rock and Cedar Park, where affordable housing, cultural offerings and numerous parks and trails win points with young families.

4. Montgomery County, TX

Montgomery County, TX

Towns include: The Woodlands

Job growth (2000-2011): 63.5%

 

Business in Montgomery County is soaring. Anadarko Petroleum is constructing a massive new 31-story tower at its headquarters in the commercial hub of the East Texas Woodlands. When completed in 2014, the skyscraper will accommodate 1,700.

Companies here aren’t just building up, they’re building out. Exxon Mobil is constructing a 385-acre campus that will house employees currently working in Houston. The oil giant is expected to relocate an additional 2,000 jobs from out of state to the new complex.

5. Douglas County, CO

Douglas County, CO

Towns include: Highlands Ranch,Castle Rock

Job growth (2000-2011): 58.6%

 

Douglas County is on a Rocky Mountain High. The area is chalking up job gains, as companies choose to relocate and expand existing operations here.

With Denver to its north and Colorado Springs to the south, the county has the enviable position of being located between the state’s two biggest cities. Its natural beauty and abundant sunshine don’t hurt either.

6. Collin County, TX

Collin County, TX

Towns include: FriscoAllenPlano,McKinney

Job growth (2000-2011): 55.9%

 

Collin County is no longer just the country cousin of the Dallas-Fort Worth Metroplex. With an influx of young families — overall population is up 59% since 2000 — its vast pool of workers is helping the area develop its own business base.

A few area companies have been hit hard by the sluggish economy. Big employers J.C. Penney and HP both recently streamlined operations. But others are growing fast. Oil and gas firm Denbury Resources is expanding its corporate campus in Plano, which is expected to add hundreds of jobs.

7. Denton County, TX

Denton County, TX

Towns include: Flower Mound,LewisvilleDenton

Job growth (2000-2011): 53.4%

 

Manufacturing is Peerless in Denton County. Earlier this month, PMFG’s Peerless Mfg. Co. broke ground on an 80,000-square-foot facility that will employ more than 150 when fully operational.

In addition to manufacturing, retail is important to the local economy. The presence of the University of North Texas, a major research school, also helps drive the medical services sector.

8. Prince William County, VA

Prince William County, VA

Towns include: Dale City

Job growth (2000-2011): 48.6%

 

Prince William County takes the crown when it comes to offering enticing perks to businesses. Expedited permits for companies in “targeted” industries that promise high-paying jobs and capital investment is just one of the ways it rolls out the red carpet.

Also behind the job boom: proximity to the D.C. Beltway, a smart workforce and competitive tax rates. Some 770 new jobs were announced last year, a nearly 14% increase from the previous year.

9. Suffolk County, VA

Suffolk County, VA

Towns include: Suffolk

Job growth (2000-2011): 43.0%

 

It’s smooth sailing for job growth in Suffolk, thanks to the Navy’s recent decision to relocate four commands here. The move will add nearly 1,000 jobs — which is about the total number of new jobs added to the area in all of 2011.

The Navy found a solid berth. Suffolk is located close to the Port of Virginia, and like many of the places on our list, quality of life is a big selling point here. Schools, transportation and community are all strong in this city with historic charm.

10. Williamson County, TN

Williamson County, TN

Towns include: Franklin

Job growth (2000-2011): 40.3%

 

Williamson County likes to treat companies to a good dose of Southern hospitality. Businesses choosing it as a base can be eligible for “concierge permitting,” which assigns them a dedicated staff member from the local codes department who helps speed up zoning and permitting issues.

The charm offensive, combined with the county’s highly skilled workforce and easy access to downtown Nashville, is paying off. Corporate giants like Verizon Wireless, Nissan Americas and United Health Group have flocked to the region.

The latest major player to join the 6,000 corporations that have outfits here is Viacom, which launched a services center this year that is expected to create more than 100 new jobs.

11. Sarpy County, NE                         16. Cass County, ND                   

12. Wake County, NC                         17. Lafayette County, LA           

13. Faulkner County, AR                 18. Burleigh County, ND

14. Houston County, GA                  19. Leon County, FL                   

15. Bonneville County, ID                20. Johnson County, IA

21. Anchorage County, AK           22. Pennington County, SD

23. Minnehaha County, SD           24. Washington County, TN

25. Garfield County, OK

Where the jobs are

 

Claims for Jobless Benefits Rise

The number of Americans seeking unemployment benefits for the first time rose a slight 4,000 last week to a seasonally adjusted 372,000, the Labor Department said Thursday, evidence that the job market’s recovery remains modest and uneven.

Separately, the Commerce Department said new-home sales rose 3.6 percent in July.

Applications for unemployment benefits are a measure of the pace of layoffs. When they fall consistently below 375,000, it generally suggests hiring is strong enough to lower the unemployment rate.

New claims for unemployment benefits have risen for two straight weeks. But they are still lower than they were five weeks ago. That suggests hiring may be improving slightly this month.

The four-week average, a less volatile measure, increased 3,750 last week to 368,000.

Better economic growth bolstered hiring last month, according to government figures. Employers added 163,000 jobs in July, the most since February. Job gains averaged only 73,000 jobs a month from April through June, not enough to keep up with a rising population. The unemployment rate rose to 8.3 percent in July, from 8.2 percent the month before.

Many economists say stronger growth is needed to create enough jobs to lower unemployment. The economy grew at an annual rate of 1.5 percent from April through June, down from 2 percent in the first quarter and 4.1 percent in the fourth quarter of 2011.

In a separate report, the government said sales of newly constructed homes in the United States rose 3.6 percent in July, matching a two-year high, to an annual rate of 372,000 units.

In the past 12 months, new-home sales have jumped 25 percent. Still, the increase is from a historically low level. New-home sales are well below the annual pace of 700,000 that economists consider healthy.

One trend holding back sales is that there aren’t many newly built homes available. New homes for sale dipped last month to 142,000, the lowest on records dating back to 1963.

Claims for Jobless Benefits Rise

As jobs become available, the vacancies are most often at the bottom

In recent months, several local companies in a variety of sectors have turned to familiar faces to take on key executive roles. Defense giant Lockheed Martin announced in April that its chief operating officer, Christopher E. Kubasik, above, would replace retiring chief executive Robert J. Stevens.

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High-level executives looking to nab a new C-suite job in the Washington area may be hard-pressed to find a place to send their résumé.

Hiring specialists and others say that local companies are frequently filling top positions from within their own ranks instead of casting a wider net, a trend that began during the recession and has continued under the uncertainty of a sluggish recovery.

And after promoting from the inside, businesses are more likely to have job openings on the lower rungs of their corporate ladder, which can create a domino effect of opportunity for the many entry-level workers who have flocked to the region in recent years.

When it comes to executive jobs, “There are fewer of them, and [hiring] is not happening in the same way with the same frequency,” said Paul Villella, chief executive of Reston-based staffing firm HireStrategy.

In recent months, several local companies in a variety of sectors have turned to familiar faces to take on key executive roles. Defense giant Lockheed Martin announced in April that its chief operating officer, Christopher E. Kubasik, would replace retiring chief executive Robert J. Stevens. In December, J.W. Marriott Jr. announced that company veteran Arne M. Sorenson would take over as the hotel chain’s chief executive. In February, Rosetta Stone promoted Stephen M. Swad, its chief financial officer, to president and chief executive.

In some cases, firms are handling a departure at the top by spreading around that person’s duties among other senior leaders, allowing them to eliminate the position.

Other times, companies are absorbing these losses with more of a chain-reaction strategy.

“Everybody moves up a notch, but the new person comes in at the bottom,” said Lisa Sturtevant, a researcher at George Mason University’s Center for Regional Analysis.

This method of filling vacancies, Sturtevant said, helps explain a recent influx of entry-level workers to the area.

According to Sturtevant’s analysis of data from the U.S. Census Bureau, about 32,000, or 13 percent, of the 250,000 workers who moved to the area from 2008 through 2010 were between 22 and 24 years old.

She said this age group “always should be a big share of movers, but this is bigger than the past.”

Seven percent of the population that lives here are 18 to 24, according to Sturtevant’s research.

As the job market crumbled elsewhere in the country, the Washington metropolitan area fared relatively well, largely because of its economy’s dependence on the fairly stable federal government.

That may be changing as the federal government looks to cut back. As other cities’ economies have picked up, so too has their ability to compete for young workers.

Still, at least some recent college graduates continue to see Washington as a place of opportunity.

Rachael Peli, a 2012 graduate of Anderson University in Indiana, said it was a key part of her decision to move to the District.

“It was mostly the jobs, to be honest,” Peli said.

She applied to jobs in Chicago, Indiana and on the West Coast, but ultimately she said she decided, “There are so many more opportunities in my field if I go to D.C.”

Shortly after arriving, she landed a position in the digital public affairs practice at Edelman.

Joe DeGioia, president of executive search firm JDG Associates, says the challenges facing executive-level job candidates may vary by sector. The constriction in high-level hiring in the recent past, he said, occurred largely among administrative or human resource jobs. However, marketing and sales executives are more in demand.

“Everybody needs more business,” DeGioia said, and these leaders would be on the front lines of generating it.

As jobs become available, the vacancies are most often at the bottom

 

Canada lost 30,400 jobs in July

Workers at a McDonald's prepare meals at a restaurant in April. Canada shed more than 50,000 part-time jobs in July.

Workers at a McDonald’s prepare meals at a restaurant in April. Canada shed more than 50,000 part-time jobs in July.

Canada’s economy shed more than 30,000 jobs in July and the unemployment rate ticked up to 7.3 per cent as employers cut back on part-time workers, according to figures released today.

The last time Canada posted a monthly job loss was November 2011, Statistics Canada said Friday.

Economists were expecting a slight gain of 6,000 jobs and for the jobless rate to hold steady at 7.2 per cent.

“We weren’t surprised that the headline total was down,” BMO economist Doug Porter noted, “but we are surprised by the details.”

The economy actually added more than 21,300 full-time positions during the month. But that was more than offset by a loss of 51,600 part-time jobs.

Were it not for a surprising 11,700 new jobs in the education sector, the headline figure could have been much lower. (The education sector typically contracts during the summer as schools shut down.)

“The news might not get any better next month,” Porter said. “Education jobs actually rose again, and may get hit hard next time.”

Aside from education, Porter noted, most sectors posted large contractions, including:

  • Retail jobs, down by 30,000.
  • Manufacturing, down by 18,600 jobs.
  • Natural resources, down by 9,000 jobs.

Regionally, employment declined in Quebec, British Columbia, Manitoba as well as in Newfoundland and Labrador, while it increased in Prince Edward Island. There was little change in the other provinces.

Canada lost 30,400 jobs in July

Jobs report: Tepid number reflects weak growth

The government said the economy added 80,000 jobs in June and the unemployment rate remained at 8.2 percent. You can’t blame Americans, who are channeling their kids in the back seat of the car on a long summer road trip, begging the question, “Aren’t we there yet?”

Sadly, the answer is no, we are not there yet.

Five years ago this month, the subprime crisis began. On July 24, 2007, Countrywide Mortgage warned of “difficult conditions” and the following week, Bear Stearns liquidated two large funds that were heavily invested in subprime mortgages gone sour. While it would take most of the world six more months to realize something really bad was brewing, with the benefit of hindsight, it’s clear that July 2007 marked a turning point.

Sure, it was hard to know at the time. After all, it was a month after the economy, as measured by GDP, grew by 3.6 percent and when the unemployment rate was 4.6 percent. (An unemployment rate of 5 to 6 percent is typical of a healthy economy, so sub-5 percent was an anomaly). But Countrywide and Bear Stearns were the canaries in the coal mine and the health of those birds was clearly ailing.

Many are wondering why the economy and the jobs market are not better off five years later. The answer can be found in the seminal work on financial crises, “This Time is Different: Eight Centuries of Financial Folly” by Carmen M. Reinhart and Kenneth S. Rogoff. As the authors note, “financial crises are protracted affairs,” so we should have all been prepared for a rough and lengthy recovery.

After reviewing eight centuries of financial crises, Reinhart and Rogoff provided a map of just how long this road trip might take. On the jobs front, they said the unemployment rate rises by an average of 7 percentage points during the down phase of the cycle, which lasts 4.8 years. We actually did a little better that the average: Unemployment increased by 5.4 percentage points from July 2007, when unemployment bottomed at 4.6 percent, to the crisis high of 10 percent in October 2009. Feel better? Me neither.

The overall economy actually fared worse than the eight centuries of data from Reinhart and Rogoff. In their analysis of crises, economic output falls from (peak to trough) 9.3 percent on average and the duration of the downturn is usually two years. U.S. GDP peaked at 3.6 percent in Q2 2007 and cratered at -8.9 percent in Q4 2008, a massive 12.5 percent drop. Perhaps that’s why a majority of economists surveyed in the latest Associated Press Economy Survey expect the unemployment rate to stay above 6 percent for at least four more years.

Earlier this year, Carmen Reinhart said “Financial crises cast a long shadow,” highlighted by weak economic recoveries and persistently high unemployment. How much longer until we get there? According to Reinhart, the post-crisis shaky period usually lasts as long as the boom that preceded it. The U.S. housing boom lasted 7 years (prices doubled from 2000-2007), which means the job market will still be unhealthy 7 years after the Great Recession officially ended in June 2009. That would be the longest stretch of high unemployment since the end of World War II.

The answer to the question: “Jobs recovery: Are we there yet?” is a resounding, “NOT YET.”

June Jobs Report:

— Jobs created: +80,000 (May revised from +69,000 to +77,000; April revised down to 68,000 from +77,000 March: 143,000; Feb: 259,000; Jan: 275,000)

— Private sector jobs created: +84,000

— Government: -4,000

— Unemployment rate: 8.2% (unchanged)

— Under-employment rate (marginally-attached, part-time): 14.9 percent (from 14.8 percent; in 2007, the rate was 8 percent)

— Total number of unemployed: 12.7 million (unchanged)

— Long-term unemployed (jobless for 27 weeks and over): 5.4 million representing 41.9 percent of the total unemployed

— Average workweek: 34.5 (from 34.4)

— Average hourly earnings: +$0.06 to $23.50 (up 2 percent over past 12 months)

By Jill Schlesinger

Jobs report: Tepid number reflects weak growth

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Software engineers have the best jobs, lumberjacks the worst

By Tiffany Hsu

Lumberjacks have the worst jobs, according to CareerCast. Software engineers have the best.

Software engineers have the best jobs, writing code for operating systems and apps at companies such as Apple and Facebook, according to a new CareerCast list. Lumberjacks, who deal with high unemployment and constant danger, aren’t as lucky.

The job search site ranked 200 jobs by considering factors such as work environment, income, stress levels, market outlook and physical demands: Is crawling or stooping involved? Toxic fumes or noise? Do employees work in a confined space? Is the position competitive? Are there travel requirements or deadlines?

Not that many workers have a choice. In a job market that remains difficult – with unemploymentstill high at 8.2% last month – many job seekers are accepting positions that they wouldn’t have in better times.

CareerCast’s conclusion: Software engineers have it good. The position commands high pay – with mid-level workers earning $88,000 a year and the ability to grow salaries more than 140% over the course of a career. Demand is high for software engineering expertise. Working conditions are great, according to the report.

Many of the other top positions also draw in some way from experience involving math, science and healthcare.

The next nine best jobs, in order: actuary, human resources manager, dental hygienist, financial planner, audiologist, occupational therapist, online advertising manager, computer systems analyst and mathematician.

Among the top 50: pharmacists, museum curators, parole officers, astronomers, surgeons and accountants.

And, in the lowest of the low, the bottom 10 counting down: Shoemakers and repairers, broadcasters, butchers, dishwashers, meter readers, servers, newspaper reporters, oil rig workers, enlisted military soldiers and dairy farmers.

Lumberjacks have the worst job. Here’s how Jake Rosa, owner of Dry Brook Custom Sawmilling in New York explains it:

“We’re still using paper and wood products all the time, but nowadays, kids would rather play video games instead of working hard and getting their hands dirty.”

Job growth slows sharply in March

Millions can find only part-time or lower-paying jobs

California unemployment predicted to stay high until 2016

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Software engineers have the best jobs, lumberjacks the worst

March Jobs: Five Things You Need to Know

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An employee drives a front loader carrying corrugated boxes at the International Paper factory in Mt. Carmel, Penn.

An employee drives a front loader carrying corrugated boxes at the International Paper factory in Mt. Carmel, Penn

The government reported today that the economy added just 120,000 jobs in March, below market expectations, while the unemployment rate fell a notch to 8.2 percent from 8.3 percent in February. Economists surveyed by Bloomberg News had a median forecast of 205,000 jobs added, so the March report was a mild disappointment. “Mild” because it’s not even clear that the economists were wrong. The government’s count is imprecise, and the economists’ estimate was within its margin of error.

Goldman Sachs (GS) economist Jan Hatzius called the report “notably weaker than expected,” pointing out that temporary employment, which is a sensitive indicator of the job market’s strength, fell in March for the first time in nine months (albeit by just 7,500 jobs). Labor Secretary Hilda Solis accentuated the positive: “Some months we are seeing tremendous job gains, while other months we are seeing more modest gains. But the trend line is clear: Our economy is growing, and our recovery is durable.”

More disappointing was the decline of 164,000 people in the labor force, which is the number of people either working or actively looking for work. That declines when unemployed people get discouraged and stop looking for a job. Those who aren’t looking aren’t counted as unemployed, which explains the small drop in the jobless rate.

Still, there’s a lot more to the jobs report than the headline statistics and the political spinning. Here are some other key data points:

Share of the working-age population with jobs

The share of working-age people who have jobs–a better measure of labor slack–plummeted from 63 percent before the recession to below 59 percent, and has been stuck there since. It was 58.6 percent in February. In March it fell to 58.5 percent, staying range-bound.

Long-term unemployment

The longer you’re out of work, the worse the damage to household finances, not to mention spouses, children, self-esteem, and even employability. The average duration of unemployment spells rose from around 17 weeks before the recession to over 40 weeks in 2011. It was exactly 40 weeks in February. In March it fell to 39.4 weeks.

Manufacturing employment

There’s a lot of cheering about the return of manufacturing jobs, but keep things in perspective. Employment in manufacturing fell one-third from over 17 million in 2000 to about 11.5 million in 2009. It rebounded to 11.9 million in February. In March manufacturing gained 37,000 jobs, in line with the recent trend.

Government jobs

Contrary to pump-priming theory, government isn’t picking up the hiring slack from the private sector. In fact, excluding a Census jobs bump in the spring of 2010, government employment has been falling since 2009. It was 22.675 million in April 2009 and 21.986 million in February, a decline of nearly 700,000. In March it declined just 1,000.

Hourly pay

At least the people who had jobs got paid a little better. In March, average hourly earnings for all employees on private nonfarm payrolls rose by 5 cents, or 0.2 percent, to $23.39. But that’s barely enough to keep up with inflation. Over the 12 months through March, average hourly earnings have increased by 2.1 percent, which is below the 2.9 percent increase in prices in the 12 months through February.

March Jobs: Five Things You Need to Know

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US unemployment claims hit 4-year low of 357K

By CHRISTOPHER S. RUGABER

FILE - Martina Ryberg, right, of Plymouth State University talks with Tara Rossetti of On Call International during a job fair for college students on April 4, 2012 in Manchester, N.H.  The number of people seeking U.S. unemployment benefits fell to a four-year low last week, as layoffs slow and the job market strengthens. The Labor Department says weekly unemployment benefit applications dropped 6,000 to a seasonally adjusted 357,000. That's the fewest since April 2008. Photo: Jim Cole / AP

Martina Ryberg, right, of Plymouth State University talks with Tara Rossetti of On Call International during a job fair for college students on April 4, 2012 in Manchester, N.H. The number of people seeking U.S. unemployment benefits fell to a four-year low last week, as layoffs slow and the job market strengthens. The Labor Department says weekly unemployment benefit applications dropped 6,000 to a seasonally adjusted 357,000. That’s the fewest since April 2008.

The number of people seeking U.S. unemployment benefits fell to a four-year low last week, suggesting employers kept hiring in March at a healthy pace.

Weekly applications dropped 6,000 to a seasonally adjusted 357,000, the Labor Department said Thursday. That’s the fewest since April 2008.

The four-week average, a less volatile measure, fell to 361,750, also the lowest in four years.

Applications have been steadily declining since last fall. The four-week average fell 4 percent in the January-March quarter, after dropping 8 percent in the final three months of last year.

When unemployment benefit applications drop consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

The downward trend in applications is a promising sign ahead of Friday’s report on March job growth. Employers added an average of 245,000 jobs per month from December through February. And the unemployment rate has fallen from 9.1 percent in August to 8.3 percent in February, the lowest in three years.

Economists forecast that employers added 210,000 jobs last month, although they expect the unemployment rate was unchanged for the second straight month.

“We believe that the economy has entered a more self-sustaining phase of the recovery with stronger job creation,” said John Ryding, an analyst at RDQ Economics, in a note to clients.

Consumers are growing more confident in the economy and are stepping up spending. Many large retail chains on Thursday reported healthy sales in March.

Gap Inc., Target Corp. and Macy’s were among the retailers reporting solid gains. Overall, revenue in stores open at least one year — an indicator of a retailer’s health — rose 4.1 percent, according to a preliminary tally of 22 retailers by the International Council of Shopping Centers.

Analysts said a better job market and rising stock prices are encouraging more Americans to shop. Last week the government said consumer spending jumped in February by the most in seven months.

Other data show consumers and businesses are more optimistic about the economy.

The University of Michigan Consumer Sentiment Survey index rose last month to its highest level since February 2011.

The service sector expanded at a healthy pace in March and stepped up hiring, according to a private survey released Wednesday by the Institute for Supply Management. A separate ISM survey of manufacturing companies found that factories also added jobs and boosted production last month.

Companies are investing more, boosting factory output. Businesses ordered more machinery, equipment and other capital goods in February, according to a government report this week.

Yet, greater hiring hasn’t led to bigger paychecks. Americans’ income grew just 0.2 percent in February, matching January’s weak increase. And after taking inflation into account, income after taxes fell for a second straight month. Consumers have boosted their spending by saving less, which economists worry isn’t sustainable.

And some companies are still letting workers go. Yahoo said Wednesday that it is cutting 2,000 jobs, or 14 percent of its work force. It is the Internet company’s sixth mass layoff in the past four years.

The number of people receiving benefits fell to 7.1 million in the week ended March 17, the latest data available. That’s about 100,000 fewer than the previous week. The figure includes about 3.3 million people receiving extended benefits under federal programs put in place during the recession.

US unemployment claims hit 4-year low of 357K

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Apple offers few a bite at employment

Apple employs just 47,000 people in the US, compared to General Motors’ 600,000 at its peak. Does that mean the knowledge-based economy is a jobless one?

By Patrick Collinson

Apple is the embodiment of the knowledge-based economy. It is America’s biggest stock-market quoted company, and with the advent of the iPad 3 will be adding to the 100m in tablet sales it has already chalked up. Yet it employs just 47,000 people – a tiny fraction of the workforce in its home state.

While California proudly hosts the paragons of the new economy – Google, Intel, eBay and Cisco – it suffers from 11.1% unemployment. Is a knowledge-based economy also a jobless one?

When General Motors was America’s biggest company it employed more than 600,000 people. Semi-skilled workers could earn decent wages, with pensions and healthcare benefits to boot. An eco-system of suppliers generated many more jobs and helped build the world’s most prosperous middle class.

Does Apple show that a hi-tech new economy enriches just a few and hollows out the rest? It’s not the only “designed in America, built in China” tech giant to employ few people on its home turf. Google has just 24,400, and eBay only 17,700.

Apple is mindful of accusations over jobs. Last week it issued a study claiming it has “created or supported” 514,000 jobs in the US. This includes 210,000 jobs connected to the creation of apps, plus 304,000 in such roles as making “planes and trucks that carry our products to our customers”. Some economists argue that taking credit for such jobs is stretching Apple’s halo towards the limit.

But other economists highlight how in areas of the US where tech dominates, it goes hand-in-hand with huge income disparities. San Jose, home to Silicon Valley, is the second worst city in the US for income inequality, according to a study by the Martin Prosperity Institute, with San Francisco not far behind. Hi-tech brings winner-takes-all wealth to a few, but creates little for the traditional middle class, says the report’s author Richard Florida.

“The job market has literally cleaved in two. On one side are high-paying, professional, knowledge and creative jobs that require considerable education and skill. But the number of lower-wage jobs in fields like personal care, retail sales and food service is expanding even faster.”

A more benign interpretation focuses on the boom-bust nature of IT in the US. Jobs in California soared during the dotcom bubble between 1997 and 2000, then peeled away.The financial crisis also hit Silicon Valley hard, as companies deferred major capital expenditure on new technology.

But economist Ross DeVol of independent thinktank The Milken Institute is more optimistic than others about a jobs recovery. He says jobs growth in California is running at 2%, compared to 1.2% in the rest of the US. “Hi-tech is still the unique engine of the US economy, and now we are in the midst of an upcycle,” he adds. “California has a unique innovation eco-system based around its universities such as Berkeley, Stanford, UCLA, CalTech, USC and Irvine. Yes, it can be a high-cost state, and yes manufacturing jobs go offshore, but the engineers are resident here.”

He blames much of California’s job woes on the sub-prime mortgage industry “which was virtually headquartered in southern California”. When the bust came, the state suffered disproportionately from both the loss of construction and finance jobs.

Today the Bay area around San Francisco remains the beating heart of new business start-ups in the US tech sector. This small corner of one US state attracts, astonishingly, 46% of all the venture capital in the entire US, says DeVol. “If anything, venture capital has become more concentrated in California than before the recession,” he says.

The focus of many start-ups is social media, the third “mega trend” driving the hi-tech sector, according to Justin Kistner of consultancy WebTrends. The first wave was about connecting to the web, which saw the rise of AOL; the second was search, which gave birth to Google; the third is social media, with Facebook (number of employees “3,000+” according to the company’s website) moving swiftly to total dominance.

“Facebook probably has two to three years before it reaches its peak, and there is probably another five years before it is replaced by the next mega trend,” Kistner predicts. Meanwhile, he says, Google is destined to head the way of Microsoft – cash generative but no longer at the forefront of the internet.

At companies in the Bay area, Facebook and social media are the focus of almost every discussion. At salesforce.com, a company using Cloud computing to bring more efficient software and marketing tools for corporates, the talk is of its social media application, called Chatter, creating the next wave of sales.

But at Autodesk, virtually a granddaddy in the local tech sector at 30 years old, visitors are shown the extraordinary technological leap that might, just, eventually lead to the return of manufacturing jobs to the west. Autodesk specialises in design software, largely for architects, builders and engineers. Now it’s working to develop 3D printing. If that sounds innocuous, it’s not. 3D printing is not about pieces of paper that have a 3D look to them. It’s about printers that actually “print” in three dimensions. It means that a printer squirts resins and metals instead of ink to physically produce goods. Autodesk’s showroom features items from vases to seat springs made by the printer. It even displays an entire motorbike made of parts “printed” by a 3D printer.

The last generation has seen jobs flee east. Maybe the next will see products made much closer to home. The next manufacturing revolution might well be in your garage.

Apple offers few a bite at employment

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