A small sign of hope...

[R13]

WASHINGTON - The outlook for jobs became a bit less bleak with January's unexpected decline in the unemployment rate, which fell to 9.7 percent from 10 percent.

President Barack Obama, speaking at a small business in a Washington suburb, welcomed the drop, saying that the numbers are a "cause for hope, but not celebration."

Indeed, Friday's unemployment report showed just how deep the job crisis remains: 8.4 million jobs vanished in the Great Recession. Economists say the nation would be lucky to get back 1.5 million jobs this year. And they say it will take at least three to four years for the job market to return to anything like normal.
Story continues below ↓advertisement | your ad here

The unemployment rate fell to its lowest level since August because a Labor Department survey of households found a sharp rise in the number of Americans with jobs. The survey found that 541,000 more Americans had jobs last month.

But those gains resulted from seasonal adjustments to the data. Without those adjustments, the data show fewer people had jobs last month.

Such adjustments are made each month and are especially large in January because of heavy seasonal changes in hiring, according to Tom Nardone, an assistant commissioner at the department's Bureau of Labor Statistics.

A separate survey of businesses found that employers shed 20,000 jobs last month. That was worse than the 5,000 gain analysts expected.

January's report offers hope that employers may start adding jobs soon. Excluding the beleaguered construction industry, the private sector as a whole added 63,000 positions.

John Silvia, chief economist at Wells Fargo, said the drop in the unemployment rate wasn't a result of a shrinking labor force, which has held the rate down in previous months.

"It simply was, people found jobs," he said. The report is "consistent with continued improvement in the labor market."

But Paul Ashworth, an economist at Capital Economics, noted that the economy has been growing for six months, yet company payrolls are still shrinking.

"Based on what we've seen so far, we think it is fair to characterize this as another jobless recovery," Ashworth said.

Left behind are people like Aimee Brittain, 31, who said she can't get employers to return her calls. She's hunting for work as a secretary after being laid off from a commercial real estate firm near her home in suburban Atlanta.

"I'm fighting against people with master's degrees for receptionist jobs," Brittain said. "I can't compete."

Obama cautioned that the data will continue to fluctuate for months.


Seasonal adjustments tend to have a big effect on the January employment data. Retailers typically lay off temporary employees who were hired over the holidays. Construction companies temporarily cut jobs as work stops due to cold weather. The data are adjusted to account for such factors so the figures will illustrate underlying trends.

The department uses separate surveys of households and businesses to measure employment. The two differed this month. Households showed a large jump in employment. But businesses reported a 20,000 drop in jobs. Over time, the two surveys generally track each other.

The household survey is more volatile than the business survey, Nardone said, and often shows large swings. In December, it reported a 589,000 drop in employment.


Unemployment rate falls to 9.7 percent - Stocks & economy- msnbc.com

[R13]

(WASHINGTON) ? The four-week average of claims, which smooths volatility, rose to its highest level since November, reflecting a large jump in claims last month.

"The economy is struggling to finally transition back to sustained job growth," Abiel Reinhart, an economist at JPMorgan Chase, wrote in a note to clients. The data "continues to indicate that a shift towards robust hiring has not yet arrived." See TIME's special "Out of Work in America."

The Labor Department said initial jobless claims fell by 6,000 to a seasonally adjusted 462,000. That nearly matches Wall Street analysts' estimates and is the second straight drop.

But initial claims need to fall consistently below 425,000 to signal sustained job creation, economists say. More hiring is critical to provide the income needed to sustain consumer spending and the broader economic recovery.

The latest figures come after other mildly positive news on employment. Job openings rose in January to their highest level in almost a year, the department said on Tuesday. And the unemployment rate was unchanged at 9.7 percent in February, the department said last week, better than analysts expected. The jobless rate hasn't risen since October. See 10 perfect jobs for the recession ? and after.

But the economy has a long way to go to repair the damage done by the Great Recession. The nation has lost 8.4 million jobs since the recession began in December 2007. Many economists expect the unemployment rate to remain above 9.5 percent through the end of this year.

The four-week average of claims rose to 475,500, reflecting a sharp increase in claims last month.

The four-week average has risen by about 25,000 since the beginning of the year, after falling for most of last year. The increase has raised concerns among economists that layoffs haven't slowed as much as hoped.

But February's employment report restored some optimism. Employers cut 36,000 jobs, less than analysts expected, and excluding the impact of the snowstorms that hit the East Coast last month, the report likely would have shown job gains, economists said.

Initial claims are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers.

In late December, claims fell to 434,000, their lowest level since July 2008. Claims peaked at 674,000 in the spring.

The department also said Thursday the number of people continuing to claim jobless benefits rose by about 40,000 to 4.56 million. But these so-called continuing claims don't include millions of people who have used up their regular 26 weeks of benefits and are receiving extended benefits for up to 73 more weeks.

Nearly 5.7 million people were receiving extended benefits in the week that ended Feb. 20, down from about 5.9 million the previous week.

Some companies are still cutting workers. Oil producer Chevron Corp. said Tuesday that it will cut about 2,000 jobs this year.

Others are hiring. The consulting firm Accenture PLC has said it plans to hire more than 7,000 people in the United States and about 50,000 worldwide by the end of August.

Read more: First-Time Jobless Claims Drop Slightly - TIME

[R13]

WASHINGTON - The number of U.S. workers filing new applications for unemployment insurance fell sharply last week, boosting hopes of recovery in the labor market.

Initial claims for state unemployment benefits fell 14,000 to a seasonally adjusted 442,000, the Labor Department said on Thursday. The report included annual revisions to the weekly unemployment claims seasonal factors going back to 2005.

Using the old seasonal factors, claims would have dropped only to 453,000, a Labor Department official said. Analysts polled by Reuters had expected claims to slip to 450,000 from a previously reported 457,000 the prior week.
Story continues below ↓advertisement | your ad here

"It's an indication that the labor market continues to improve. We have a recovery, but it is not robust; it is still fragile. The trend continues to move in the right direction," said Ward McCarthy, chief financial economist at Jefferies & Co. in New York.

U.S. stock index futures held gains after the report, while Treasury debt prices trimmed gains slightly. The U.S. dollar was slightly higher against the yen.

The four-week moving average of new claims, which irons out week-to-week volatility, fell 11,000 to 453,750, the lowest since September 2008.

The decline in initial claims last week pushed them into a range that analysts reckon signals labor market stability.

The labor market has lagged the economy's recovery from its worst downturn since the 1930s, but payrolls are expected to grow this month as the government steps up hiring for the 2010 census. About 8.4 million jobs have been lost since December 2007, when the recession started.

The number of people still receiving benefits after an initial week of aid fell 54,000 to 4.65 million in the week ended March 13, the lowest since December 2008, the Labor Department said. The so-called continuing claims data included the household survey week, from which the unemployment rate is derived.

The unemployment rate has been unchanged at 9.7 percent for two months. Analysts had expected continuing claims to slip to 4.55 million.

The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.6 percent in the week ended March 13.


Jobless claims fall, raising recovery hopes - Stocks & economy- msnbc.com

[R13]

NEW YORK (CNNMoney.com) -- Stocks rallied Monday, with the Dow edging closer to 11,000, as investors returning from a long weekend welcomed last week's jobs report, the morning's strong housing market report and the launch of Apple's iPad device.

The market also kept an eye on the 10-year Treasury note yield, which surged to 4% as investors dumped treasuries in favor of riskier assets. Oil prices surged to nearly 18-month highs. The dollar was mixed versus other major currencies.

The Dow Jones industrial average (INDU) added 34 points, or 0.4%. Earlier, the Dow rose to within 11 points of 11,000, a key psychological level. The Dow last crossed 11,000 during the session on Sept. 29, 2008, when it touched 11,139.94. It last closed above 11,000 on Sept. 26, 2008, ending at 11,143.13.

The S&P 500 index (SPX) gained 7 points, or 0.6%. The Nasdaq composite (COMP) added 22 points, or 0.9%.

Stocks gained last week, rising for the sixth of seven weeks. The advance left the Dow and S&P 500 at fresh 18-month highs. But markets were closed for Good Friday, making Monday the first time investors were able to react to Friday's big jobs report from the Department of Labor.

Monday also was the first chance for investors to react to the strong sales for Apple's iPad tablet computer, which launched Saturday amid much enthusiasm.

There were also positive reports on housing and on the services sector.

"The pending home sales report shows a stable housing environment and the services sector report was a consistent follow-through to last week's manufacturing report," said Scott Anderson, chief economist at Wells Fargo.

"Following the jobs report, growth looks pretty solid," he said. "It suggests we can avoid a double-dip recession."
10 highest-paid CEOs

Jobs: Employers added 162,000 jobs to their payrolls in March, more than in any month in the last three years, the government said Friday.

Economists surveyed by Briefing.com were expecting an even bigger gain, of 184,000 jobs. However, the report was not considered disappointing as it showed growth even when accounting for temporary employment and the impact of 48,000 once-in-a-decade census jobs.

Employers cut 14,000 jobs in February.

The unemployment rate, generated by a separate survey, held steady at 9.7% as expected.

Apple: The tech leader said it sold 300,000 of its iPad tablet computers on Saturday and that users downloaded over one million apps from the company's App store and over 250,000 ebooks from its iBookstore. Shares of Apple (AAPL, Fortune 500) gained 1% Monday.
0:00 /1:48Job growth ... now what?

Economy: The pending home sales index posted a surprise jump in February, rising 8.2% to 97.6 from a revised 90.2 in January. Economists expected the report from the National Association of Realtors to have declined by 1%, according to Briefing.com forecasts.

A separate report showed growth in the services sector of the economy. The Institute for Supply Management's (ISM) services sector index rose to 55.4 in March from 50 in February, versus forecasts for a rise to 53.6. Any reading over 50 indicates expansion in the sector.

Bonds: Treasury prices tumbled, raising the yield on the 10-year note to 4% from 3.86% Friday. Treasury prices and yields move in opposite directions.

In the afternoon, the government saw a strong response to its auction of $8 billion in 10-year Treasury Inflation Protected Securities (TIPS), with bidders offering to buy 3.43 times the amount of debt sold, up from the recent average. Indirect bidders, which include foreign central banks, bought 37.5% of the sale.

A January offering of $10 billion in 10-year TIPS saw bidders offering to buy 2.65 times the amount of debt sold with a 40.7% indirect bidder rate.

Treasury is auctioning $82 billion in debt this week.

The dollar and commodities: The dollar gained versus the euro and fell against the yen.

COMEX gold for June delivery rose $4.30 to $1,129.10 per ounce.

U.S. light crude oil for May delivery rose $1.75 to $86.62 a barrel on the New York Mercantile Exchange, the highest close for crude since October 2008.

World markets: In overseas trading, European markets rallied. Asian markets ended higher as well.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by almost three to one on volume of 500 million shares. On the Nasdaq, advancers beat decliners two to one on volume of 1.36 billion shares. To top of page

CNNMoney.com Market Report - Apr. 5, 2010