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Tag: Unemployment

  • Marc Andreessen: ‘AI Won’t Cause Unemployment’

    Marc Andreessen: ‘AI Won’t Cause Unemployment’

    Tech icon Marc Andreessen has weighed in on AI’s impact on the workplace, and he doesn’t believe it will lead to unemployment.

    Artificial intelligence is dominating the news, thanks to OpenAI, ChatGPT, and Microsoft’s incorporation of the tech into its Bing search engine. One of the leading concerns surrounding AI is that it will lead to a mass wave of unemployment as AIs and chatbots replace human beings.

    According to Andreessen, however, those fears are largely overblown and ignore historical precedence. He lays out his case in a Substack post:

    We had two such anti-technology jobs moral panics in the last 20 years — “outsourcing” enabled by the Internet in the 2000’s, and “robots” in the 2010’s. The result was the best national and global economy in human history in pre-COVID 2019, with the most jobs at the highest wages ever.

    Andreessen then goes on to say that he could make all the “standard arguments against technologically-driven unemployment” that applied to outsourcing and robots, and apply them to AI. However, he says those arguments are not even needed because of a fundamental difference regarding AIs role in the current economy: it is illegal.

    That’s right, according to Andreesseen, AI is already illegal in much of the economy, restricting how much of an impact it can make on the larger job market.

    Andreessen breaks down the economy into two sectors: one that is heavily regulated, either by the government or by itself. These sectors, by their very nature, are “technologically stagnant.” In contrast, the other sectors are those industries where there is less regulation and technology is allowed to have a progressive and disruptive influence.

    Now think about what happens over time. The prices of regulated, non-technological products rise; the prices of less regulated, technologically-powered products fall. Which eats the economy? The regulated sectors continuously grow as a percentage of GDP; the less regulated sectors shrink. At the limit, 99% of the economy will be the regulated, non-technological sectors, which is precisely where we are headed.

    Therefore AI cannot cause overall unemployment to rise, even if the Luddite arguments are right this time. AI is simply already illegal across most of the economy, soon to be virtually all of the economy.

    Andreessen’s take is an interesting and thought-provoking analysis. You can read his full post here.

  • Businesses Struggle to Fill Open Positions as US Workers Quit Their Jobs in Record Numbers

    Businesses Struggle to Fill Open Positions as US Workers Quit Their Jobs in Record Numbers

    According to the latest statistics from the Bureau of Labor, a large number of US workers have been quitting their jobs recently. In May, US workers said goodbye to their jobs in record numbers. The statistics showed that 2.4 percent of employees left their companies that month, a higher number than the previous high reached in April 2001.

    Some analysts see this as a positive indication of how strong the job market is these days. After all, employees usually only quit their jobs for greener pastures. People who switch employment often receive higher pay and greater benefits than those that stay put.

    Government data also revealed that there were fewer jobs advertised in May than in April. The numbers showed that there were 6.84 million jobs in April and only 6.64 million the following month. The 3 percent drop was the highest in the almost twenty years that records have been saved.

    However, the number of open positions were higher than that of the unemployed for the second time in as many years. A look at the available jobs in May, factored in with the number of unemployed workers, shows that there are 0.91 out-of-work individuals for every available job.

    The figures mirror a solid job market pushed by employers who are moving to expand their employee base. The recent job report also indicated that the hiring rate was good and that unemployment numbers remained at a low 4 percent.

    The current shortage in the labor pool and the competition for jobs should prompt businesses to increase salaries in order to secure workers. However, wage hikes remain at modest levels. Hourly earnings increased to 2.7 percent in June but aren’t commensurate with the 4 percent yearly gains that are typical in a healthy economy.

    The large discrepancy between unfilled job positions and unemployed workers is forcing companies to become more flexible with their hiring. Where businesses used to employ people with specific skills, now they’re more open to choosing applicants who could thrive in the company’s culture and are willing to learn required skills.

    However, companies are still cautious and are embracing change much slower than they did in the 1990s, the last time the country enjoyed a solid job market. Staffing experts say that the hiring process has become more thorough in the last twenty years, as background checks intensified and more screening steps were introduced. This is also why it’s taking longer to fill many open positions.

    [Featured image via Pexels.com]

  • Switzerland $25 Minimum Wage Voted Against

    Switzerland voted Sunday to reject a measure called the Decent Salary Initiative, that would establish a minimum wage of $4,515 per month in that country, with 76.3% of voters opposed to the idea.

    The proposed monthly minimum wage equates to roughly $25 per hour, which would be the highest in the world. Proponents called the wage hike necessary, while opponents felt that it would seriously damage the Swiss economy.

    Hans-Ulrich Bigler, director of the Swiss trades association, commented that “It is a clear vote by the people, a vote of trust in the economy.” The Decent Salary Initiative would benefit roughly 300,000 Swiss workers, with the vast majority being immigrants working in agriculture, housekeeping and catering jobs.

    Swiss voters turn out:

    At present, 90% of Swiss workers already earn more than the proposed $25 per hour, with the average wage being roughly $37 an hour, though union leaders in the country of 8 million will continue to push for higher wage rates for unskilled laborers, which are still some of the highest paid in the world. Though the average household income in Switzerland is about $6,800 per month (as compared to $4,300 in the United States), that country likewise features some of the highest prices for goods and services worldwide.

    The Swiss Business Federation president Heinz Karrer commented that the landslide result in the poll revealed that “the initiative hurts low-paid workers in particular.” Voters realized that forcing wage hikes could lead to job cuts, and Switzerland’s 3.2% unemployment rate is among the lowest globally.

    Luisa Almeida, an immigrant from Portugal who works in Switzerland as a housekeeper commented, “If my employer had to pay me more money, he wouldn’t be able to keep me on and I’d lose the job.”

    In April a minimum wage referendum was on the table in the United States Senate. Democrats had pushed for a $10.10 hourly minimum, which was promptly shut down by the GOP.

    Image via Wikimedia Commons

  • Unemployment Benefits Extension Could Be Postponed

    On Wednesday, U.S. House of Representatives Speaker John Boehner said that the proposition to continue long-term unemployment benefits “is simply unworkable” when questioned about the potential to offer benefits for the beginning five-month lapse of 2014 and stretching retroactively all the way back until December 29, 2013. Reports claim that the Senate is expected to vote on legislation to accommodate the extension of jobless benefits within the foreseeable future; however, debates are already raging regarding the issue.

    According to a statement released by Speaker Boehner, “There is no evidence that the bill being rammed through the Senate by Leader Reid meets that test, and according to these state directors, the bill is also simply unworkable.”

    Adam Jentleson, who is the spokesperson for Senate Majority Leader Harry Reid, does not think that considerations to reach a compromise should be ignored. “It is hard to imagine Speaker Boehner simply walking away from the thousands of people in Ohio who lost their jobs through no fault of their own and need this lifeline to make ends meet while they continue to look for work,” Jentleson explained.

    The National Association of State Workforce Agencies (NASWA) has expressed concern that the implementation phase could prove to be a complicated process even if the legislation is approved. There could be a significant delay before checks are submitted to unemployed, which may extend beyond the June 1 expiration date initially projected in the bill.

    The NASWA sent a letter to Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell that read as follows:

    “The National Association of State Workforce Agencies (NASWA) has concerns with S. 2148, the Emergency Unemployment Compensation Extension Act of 2014. This legislation would temporarily reauthorize the Emergency Unemployment Compensation (EUC) program until June 1, 2014, but would substantially increase the administrative burden on states.

    NASWA does not have a position on whether to extend the EUC program because our member states hold varying positions on that question. However, NASWA wants you to know states have significant concerns about the implementation of this legislation.”

    Image Via Wikimedia Commons

  • U.S. Economy Adds 175,000 Jobs in February

    U.S. Economy Adds 175,000 Jobs in February

    The American economy added 175,000 jobs in February which is higher than the goal of 149,000 set by Wall Street economists. However, the numbers on actually hiring were a little less impressive.

    With all the new jobs, the unemployment rate still rose .1% to rest at 6.7% for February. That’s 10.5 million people if you’re counting.

    What’s the cause of the uptick in unemployment? The severe weather experienced around the nation this winter has been one possibility tossed around at some pretty heated debates among economists and traders, according to the New York Times. However, the uptick can also be attributed to optimistic unemployed people returning to the job search market.

    In fact, some involved in the debate will not even consider the numbers for February “clean data”. Those will wait for the weather to clear and look forward to the numbers from March and April for a more accurate account of how things really look for the U.S. economy.

    February’s report was difficult to predict because other surveys have offered contradictory signs about the labor market this week, such as the private sector adding 162,000 jobs, and the public sector adding 13,000.

    Ian Shepherdson, chief economist at Pantheon Macroeconomics, said before February’s numbers were announced, “We are braced for just about anything tomorrow. Mixed payroll signals and unpredictable seasonals make tomorrow’s number a very tough call.”

    February’s numbers for some people undoubtedly create a bright outlook after previous uninspiring reports. December saw the economy only adding 75,000 jobs. January was a little better with 129,000 jobs added, but both fell short of the hopes presented by Wall Street. With the announcement, the blow was softened by about 25,000 as the jobs numbers for January and February were revised, according to AFP.

    However, the optimistic numbers for February are still down from last year’s average of 190,000 added jobs.

    Image Via Wikimedia Commons

  • Janet Yellen to Make First Speech as New Fed Chair

    Janet Yellen, as the newly appointed Fed chair and first woman to ever hold the post, will make her first comments today before the House Financial Services Committee and then Thursday before the Senate Banking Committee.

    She has addressed these committees before as vice chair for three years and as a leading economist for a long time, but now she faces a whole new spotlight as she steps into the shoes of Ben Bernanke.

    What investors are anxious to find out is if Fed officials are going to hold fast to the message that the economy’s outlook is bright enough to withstand a slight pullback in their stimulus but that rates should stay low to fuel a shaky economy, according to Bloomberg.

    Her first address is important, because it will also give them a clue as to where she stands on their concerns about the economy and the job market, turmoil in global markets and uncertainty about her direction at the Fed. She has already stated that she wants the U.S. central bank to be known as a champion of Main Street, but does she have what it takes to see it through?

    “A new Fed chair’s first testimony is always a testing period,” said Diane Swonk, chief economist at Mesirow Financial.

    Yellen will most likely address many issues, including payroll and her likely intention to continue with the strategy to trim bond buying by $10billion, even though last month employer’s added only 113,000 jobs instead of the anticipated 180,000.

    “While the last couple of payroll readings have been disappointing, we do not expect this to change the currentcourse of asset-purchase tapering,” Joseph Lavorgna, chief U.S. economist at Deutsche Bank Securities Inc. and a former New York Fed economist, said. “We view the recent payroll weakness as temporary and likely to reverse.”

    She will also probably back further away from the The Federal Open Market Committee’s December statement that they probably won’t raise the federal funds rate until “well past the time” the jobless rate falls below 6.5 percent. It is reported that most panel members didn’t favor moving the threshold.

    It is also likely that she will announce her intention to continue Bernanke’s policy of holding the main rate near zero and gradually tapering monthly bond purchases.

    As groundbreaking as her first address is, there is sure to be relentless scrutiny and pleas from both sides of the aisle for the direction which the Fed should now take. Republican lawmakers will most likely try to persuade Yellen to ease up on the incessant regulation of financial institutions and to “be more aggressive in reversing” record stimulus, said David M. Jones, president of DMJ Advisors LLC, a Denver-based economic consulting firm, and a former Fed economist.

    On the other hand, Democratic lawmakers are sure to plea for Yellen’s help to over income inequality and persistent joblessness, Jones said.

    Sen. Sherrod Brown, Democrat from Ohio who spoke with her at length during the confirmation process said of her recently, “She understands — people that are sober-minded about this understand — that income inequality is bad for the wealthy, too. It’s bad for a long-term growing economy. She’ll be a Fed chair that gets out and sees the real economy more and talks to people.”

    These are just a few of the expected inquiries and responses that Janet Yellen will face right away in the beginnings of her term as Fed Chair, and she will likely have a hard time hearing pleas from every direction and playing it right down the middle with Fed policy, but whether or not she will be able to handle it remains to be seen.

    Image via youtube

  • Disney Layoffs: Hundreds Expected To Be Axed

    Disney Interactive, the video game and digital media subsidiary of The Walt Disney Co., will soon layoff “several hundred” of its employees from a total staff of about 3000, according to the Wall Street Journal. The cuts are expected to be announced by Wednesday.

    The subsidiary has been underperforming for several years now and has reportedly lost over 200 million a year between 2008 and 2012. In the most recent fiscal year, Disney Interactive posted earnings of 1.1 billion but lost $87 million in overall operating costs, making it the only segment of the Disney conglomerate to lose money. However, last quarter revenue reports show that the subsidiary made a profit, earning $396 million while only spending $16 million in operating costs. This is just the second time in five years that Disney Interactive managed to make a quarterly profit.

    The company is clearly trying to turn the corner. Late last year Disney launched the video game, Disney Infinity, which includes plastic toys that can be mounted on an electronic base to change the virtual action — so far, it’s a hit. Despite this, in November, Disney axed the division’s co-president John Pleasants leaving Jimmy Pitaro as its sole president. He’s now left with the task of restructuring the division.

    According to sources the majority of the layoffs will come from Playdom, a division that manages Disney’s social media and produces games. Disney bought Playdom in 2010 for $563 million, but has struggled to turn it into a successful game franchise during that time.

    The expected layoffs from Playdom come after a slew of other recent layoffs. In January 2013, the company shut down its Austin, Texas based developer Junction Point Studio, laying off about 50 workers. In 2011, Disney got rid of some 200 employees after it shut down Propaganda Games, the studio for the “Tron: Evolution” video game franchise.

    Images via Twitter

  • Macy’s Cuts Jobs Despite Successful Christmas Sales

    Bad news for Macy’s employees. The retailer announced on Thursday that it will be laying off about 2500 of its employees despite having successful earnings over the Christmas season. Macy’s announced that it intends to close a total of 5 stores in Arizona, Kansas, Missouri, New York and Utah by this spring. In addition to giving some employees the boot, the remaining staff will take on additional duties or be transferred, Macy’s said. The decision is expected to save the company $100 million — adding a big boost to its bottom line.

    The news will likely be disheartening for its employees, especially given the stagnant U.S. job market.

    On Wednesday Macy’s CEO Terry J. Lundgren said that consumers gave it a “vote of confidence” during the holidays, “even in a questionable macroeconomic environment with challenging weather in multiple states.” Macy’s saw an increase in sales of 3.6 percent from the months of November through December for stores that were open for more than a year. The increase was 4.3 percent when third party licensee departments were included.

    It did, however, adjust its predictions for this year’s second half saying that “same-store” (stores open for more than a year) sales increased 2.8 to 2.9 percent instead of 2.5 to 4 percent. Nonetheless, that translates to 2.3 to 2.5 percent growth in the fourth quarter, said the company. This year should see earnings of $4.40 to $4.50 per share.

    This earnings projections seem brilliant for Macy’s and its investors but not quite as glowing for the folks who are soon to find themselves without a job. However, one bright spot could be found when Macy’s said it will continue to hire employees in its online operations, direct-to-consumer fulfillment outfit, and new stores.

    Image via Wikipedia

  • Unemployment Extension Possible in 2014?

    The million or more people who will no longer be seeing unemployment checks – money that has kept food on the table – are unsure of how they will survive.

    However, the possible good news is that next week, as early as Monday, Senate Democrats will move to vote on a three month extension for unemployment benefits for the 1.3 million people who lost them just after Christmas.

    But presently, people are scrambling, trying to figure out how they are going to pay bills and feed their families. Many are talking about selling cars, moving, taking minimum wage work and pawning personal items in an effort to try to stay afloat.

    Greg and Barbara Chastain of Huntington Beach, Calif., put their two teenagers on the school lunch program and cut back on dining out after losing their T-shirt company in June following a dispute with an investor.

    They’ve exhausted their state unemployment benefits and now that the federal extensions are gone, unless they find jobs the couple plan to take their children out of their high school in January and relocate 50 miles east where a relative owns property so they can save on rent.

    “We could let one of our cars go, but then you can’t get to work — it’s a never-ending cycle,” 43-year-old Greg Chastain said while accompanying his wife to an Orange County employment center. He said they eventually might try their luck in a less expensive state like Arizona or Texas if he can land a manufacturing job there.

    The five-year program extension that provided for the longer-term unemployed (6 months or more) ended and is going to hurt hundreds of thousands who still have not found jobs. The federal government program provided an average monthly stipend of $1,166.

    Obama and the Democrats in Congress are not in favor of ending the program, but the extensions were dropped due to a budget deal struck with Republican lawmakers earlier this month who want the $26 million annual cost eliminated.

    Obama reprimanded congressional Republicans for abandoning Americans and allowing their lifeline – unemployment – to expire on December 28th, stating the restoration of those benefits should be lawmakers’ “first order of business” when they return from their holiday break.

    “Just a few days after Christmas, more than one million of our fellow Americans lost a vital economic lifeline – the temporary insurance that helps folks make ends meet while they look for a job,” he said in his weekly address. “And for many of their constituents who are unemployed through no fault of their own, that decision will leave them with no income at all.

    “And denying families that security is just plain cruel,” he added. “We’re a better country than that. We don’t abandon our fellow Americans when times get tough – we keep the faith with them until they start that new job.”

    Image via Wikimedia Commons

  • Unemployment: A Long Term Problem; No End in Sight

    CNN Money reported recently about one woman’s struggle to find a job. Lena Rouse was an IT analyst at a regional bank and was laid off from her job. She has 2 Master’s degrees – one in business and one in IT. She has 22 years of work experience. And she spent all of 2013 unemployed in Columbus, Ohio, the largest city in the state, and home to five Fortune 500 companies.

    Rouse’s tale is becoming all too common. And people are asking the question, “If someone with 2 Master’s degrees, that much experience, and a good résumé can’t find a job in over a year, what hope is there for the rest of us?”

    Rouse’s story gets even more frightening when you factor in the news that federal funding for long-term unemployment benefits was not renewed before legislators headed home for the holidays last year. Rouse received her last benefit check this week.

    According to Labor statistics, 37% of unemployed people have been out of work for at least 6 months. These folks are entering a phase of unemployment that renders then virtually unhireable.

    “I’ve heard from recruiters at larger companies, and they will absolutely tell you they don’t like to hire long-term unemployed people,” Rouse said. “They think our skills are less sharp.”

    Twenty-two years of experience gets trumped by 6 months of unemployment? And some people are working freelance as fast as they can, even taking additional training as they can afford it, to keep up with their professions.

    A Fundamental Change

    More and more, folks are starting to realize that a fundamental change has taken place over the past few years since the market crash and recession of 2008. They listen to financial news shows and hear about how much “the economy” has bounced back, how great “the market” is doing. But the very next news story talks about how unemployment numbers are still high, even new unemployment claims. They hear political parties blame each other. They hear economists bicker about models for recovery. But no one is answering the question: If the market is better, why aren’t the jobs coming back?

    MoneyNews reported last year on the meteoric rise in temp jobs – positions with few, if any, benefits, abysmal working conditions, and no expectation of long-term employment, much less permanence and retirement.

    Businesses are moving to a temp model. The days of in-house Human Resources, long-term hiring, retirement, and good benefits are gone. Corporations used the 2008 crash as cover for divesting themselves of their most troublesome resource: people. No one could blame them for laying off workers. Everyone was doing it. But during the tumult of the economic recovery, businesses went out and changed their structure entirely.

    No more hiring. Now they contract with a temp agency who does all the screening and dirty work for them, including the firing.

    According to the Bureau of Labor Statistics, over one-fifth of job growth since the recession ended in 2009 has been in the temp sector. In fact, temp work is outpacing traditional hiring tenfold.

    The “coal towns” of last century are gone. But now we have “temp towns,” neighborhoods or whole towns where even people with vocational training can’t get entry-level factory work without being first directed to a temp agency.

    One of the worst effects of such a model is the conundrum over health insurance. Commonly in the United States, getting health insurance was tied to ones job. If the U.S. business community is moving toward a temp model, how can one be expected to get health insurance through work? Even if that person has been working steadily and receiving a paycheck for weeks, they are still under contract, and their “employer” is not required to provide them health insurance.

    All these factors, and many more like them, come into play every time a person sits down with today’s version of the Help Wanted classifieds – a job search website or app. They watch useless job postings scroll by, positions they long ago applied for and never could even get more than an automated email reply to. Many postings are outright scams, and it takes applicants weeks to suss out the chaff.

    It’s a problem that won’t likely be solved anytime soon.

    Image via YouTube

  • Unemployment Benefits Expire For 1.3 Million

    This weekend, millions of Americans are suddenly going to stop receiving their unemployment benefits. The extended federal benefits plan expires this Saturday, the 28th, forcing 1.3 million to go without a source of income.

    These long-term federal benefits were created by President Bush in the recession of 2008, and since then have been extended 11 more times. The most recent extension allowed for a total of 73 weeks of government assistance. But last week, Congress failed to extend the benefits plan any further.

    Federal long-term benefits kick in after the state’s unemployment benefits have run out. On average, long-term unemployment runs from 14 to 47 weeks. The typical weekly benefit check is $300. Which is roughly the pay of a full-time job at minimum wage. The Obama administration says these weekly checks were enough to keep 11 million Americans above the poverty line and supported roughly 17 million children. And now, that source of reliable income is gone.

    So how long will these long-unemployed have to live without benefits? According to CNN, senators will bring it to vote as soon as they are back from recess. A majority of Democrats have pushed for another extension but are facing opposition from Republicans, forcing a stalemate.

    The benefit extension plan isn’t cheap: according to the Congressional Budget Office, the cost to extend the federal benefits by another year is around $26 billion. But many argue that the extra money helps stimulate the economy, as families use their checks for groceries, shopping, and paying the bills. President Obama supports extension of the plan, calling on Congress to make temporary extension their “first order of business” in 2014. Obama has said that he would sign a proposal “right away,” but with the stalemate between Republicans and Democrats, prospects for immediately passing the bill seem weak.

    Image via Wikimedia Commons

  • $11.50 Minimum Wage: Sound Nice?

    Community leaders in Seattle have vocalized desires to raise minimum wage, and now leaders in Maryland have instigated the process to implement policies that increase wages. Presently, the federal minimum wage is set at $7.25 per hour though some states have set the level higher. On December 17, 2013, a representative from Prince George’s County signed a document to increase minimum wage in the area to $11.50 by 2017. Likewise, another county in Maryland (Montgomery County) signed documents to also increase minimum wage.

    Economic Policy Institute analyst David Cooper said, “We estimate that only about 10 percent of the workers earning less than $12 per hour in Montgomery County are teens.”

    According to the president and CEO of the chamber of commerce for Prince George’s County, David Harrington, there needs to be a balance between satisfying the needs of employees and determining the functioning level of viability for employers. “Clearly there’s a need for an increase, but what is the level to which businesses can still create jobs even while paying a higher wage,” Harrington said in an interview with CNNMoney.

    The city council for Washington D.C. also approved increasing the minimum wage to $11.50 an hour on Tuesday. The bill will now be sent to Mayor Vincent Gray who has been outspoken against raising the minimum wage to an amount as high as $11.50. Mayor Gray had previously proposed increasing the minimum wage to $10 an hour in order to determine how an increase would influence the labor market. While Mayor Gray has the potential to veto this bill, the council could then opt to override the veto.

    Council member Tommy Wells spoke about his support for this legislation. , “I had the leadership to get nine votes…I led the first bill to show I could get this done. I promised I’d get this done, and I’m getting it done today,” Wells said.

    Council member Vincent B. Orange said, “This is legislation introduced by me.” Orange added that the underlying support behind this process is “not leaving people behind” in the midst of the present economic climate.

    Image Via Wikimedia Commons

  • World Economy To Continue Modest Growth in 2014

    Since the economic downturn that began more than five years ago, the world economy has struggled to lurch forward. There are signs, however, that the global economy is beginning to pick back up, albeit slowly.

    Market research firm IHS today released top economic predictions for the coming year. Among them is the prediction that the global economy will grow 3.3% in the year 2014. This growth would represent a slight increase over the 2.5% growth measured for 2013.

    This modest growth could be an indication that economies around the world are finally digging themselves out of the financial crisis of the past half-decade. IHS expects the U.S., Europe, and China to lead the economic turnaround through growing export markets. Growing consumer spending in the U.S. and European governments ending austerity spending programs will be two of the factors in the growth seen next year.

    “The easing of the twin headwinds of private sector de-leveraging and public sector austerity will bolster the improved outlook, especially for the developed economies,” said Nariman Behravesh, chief economist at IHS. “Many emerging economies will also likely enjoy stronger growth in 2014, pulled along by export-led growth to the United States, Europe and China. That said, the global growth rebound is likely to be quite modest.”

    Other predictions from IHS include a mixed bag of economic trends.

    The U.S. dollar is predicted to strengthen as the U.S. economy grows 2.6% in 2014. The U.S. Federal Reserve is also expected to begin ending its massive stimulus programs over the course of the year.

    Emerging markets are expected to see significant real GDP growth through exports, though commodity prices are expected to stay flat.

    Despite the good indications, IHS does not predict the economic turnaround will include all of those who have lost their jobs over the past few years. The firm predicts that unemployment in established markets will hit 7.9% in 2014 – only a slight drop from this year’s 8.1% unemployment. Improved productivity and continued reorganization efforts among companies were cited by IHS as major causes for continued high unemployment.

  • Unemployment Claims Rise Due to Shutdown & Glitches

    The unemployment weekly claims report released by the US Department of Labor indicates that initial unemployment claims rose to 374,000 this week, up 66,000 from the 308,000 total last week.

    The shutdown of the United States government was bound to impact the labor market, but the impact on these reported claims is perhaps less than one thinks. While 500,000 government employees are available to sign-up for unemployment benefits due to having been furloughed by the shutdown, these claims are filed under a different category. Thus, their numbers have not been added into this latest report from the Department of Labor.

    That being said, approximately 15,000 of the new claims can be directly related to private sector positions affected by the shutdown. Employees hired by government contractors or those who work in businesses near federal landmarks are among those private sector members who have seen the most drastic layoffs. URS Corp., a San Francisco-based engineering services firm, had to layoff around 3,000 workers due to the decreased workload from the government shutdown.

    About one-half of the increase in unemployment claims can be linked to glitches in California’s unemployment system. Last week, the state upgraded their computer systems. The glitch delayed new claims from being processed, meaning the backlog of new filings was just pushed through this week.

    The 66,000 new claim increase is the largest increase in jobless claims since superstorm Sandy hit in November of last year. That being said, the adjusted new claims, once all the anomalies are accounted for, is around 326,000. This number is almost directly in-line with the 4-week average of 325,000, therefore economists believe there is no real reason to worry about this particular surge.

    Chief US economist for Capital Economics, Paul Ashworth, stated that “The broader picture is still that labor market conditions are improving, albeit not quite as much as we previously thought.”

    Ashworth’s statements are corroborated by the fact that the continued, insured unemployment rate decreased by 16,000 from the previous week, meaning that people who were unemployed are finding work somewhere. Unfortunately, though, the extended unemployment rate continues to increase.

    The simple fact is that unemployment rates will continue to climb as long as the shutdown persists. While headway has been made with news of the Republicans willing to negotiate raising the debt ceiling, a positive economic turnaround still seems to be a long-ways down the road.

    Image via Wikipedia

  • U.S. Employment to Hit Pre-Recession Levels in Many States

    Earlier this month, the U.S. Department of Labor released figures showing that around 169,000 jobs had been added in the U.S. in August. Though employment numbers have been rising slowly now for months, unemployment across the U.S. remains at just above 7%. New research has now shown that while many states are beginning to recover from the so-called “great recession,” others will continue to struggle with high unemployment for years.

    Analyst firm IHS today released predictions that 18 U.S. states will have returned to “peak employment” by the end of this year. Peak employment in this case refers to the maximum level of employment seen before the recession. A few states, namely Texas, Alaska, North Dakota, and New York had already returned to peak employment by the end of 2012.

    Other states have taken the recession harder. Manufacturing downturns have strongly affected Michigan and Rhode Island, which are projected to still have close to 9% unemployment at the end of this year. Nevada, which IHS says was hit particularly hard by the housing crisis, could be even worse off, with a projected 9.6% unemployment rate at the end of 2013. IHS believes these three states won’t meet their peak employment levels before the end of 2018 at the earliest. California, Illinois, and Florida are also expected to end 2013 with relatively high unemployment numbers.

    “Florida, though perennially among the states with the fastest rates of job growth before the housing downturn, will not return to its peak employment until the third quarter of 2016,” said James Diffley, U.S. regional economist for IHS.

  • 169K Jobs Added Last Month, Unemployment Hangs at 7.3%

    The U.S. employment numbers for the last few months have been ok. Not good or great, but generally trending in the right direction. Back in July, the U.S. Department of Labor revealed that unemployment insurance benefits dropped by 48,000 from the same month in 2012. Last month, the Labor Department released the good news that jobless claims are down to a five-year low. With just under 4.7 million Americans claiming unemployment benefits at the end of July, claims were down over 154,000 from that same week one year ago.

    Today, the Bureau of Labor statistics released the latest unemployment numbers and they are once again ok. Total unemployment in the U.S. changed little month-over-month. An estimated 11.3 million Americans are out of work and the unemployment rate is hanging a 7.3%, down from 7.4% last month and 8.1% this time last year.

    Hiring for the past month was also ok, with 169,000 new jobs added in August. Though this number fell short of previous estimates, it represents slight progress on the employment front. Most of the new hires came in the retail and health care sectors, while the bureau’s information category saw declines in employment numbers. 44,000 jobs alone were added in retail last month, adding to the 393,000 retail jobs created over the past year.

    Long-term unemployment (those out of work for at least 27 weeks) also saw little change over the past month, though that number has dropped by 733,000 year-over-year. Those who are considered long-term unemployed currently make up around 38% (4.3 million Americans) of the total unemployed numbers.

  • Jobless Claims in U.S. Hit Five-Year Low

    Jobless Claims in U.S. Hit Five-Year Low

    Last week, the U.S. Department of Labor reported unemployment insurance benefit claims were down from the previous year for the week ending July 13 – down some 48,000 claims. The numbers began to spark hope that the U.S. economy, or at least hiring numbers, were on the rise once again.

    This week, the Department of Labor is reporting that jobless claims are down once again – to levels not seen in years. 326,000 unemployment insurance claims were filed during the week ending July 20, the lowest number seen since January 2008. That number is also down significantly from the previous week, when 336,000 Americans filed claims.

    The total number of Americans claiming unemployment insurance benefits is also down. Including state employees, federal employees, and veterans, just under 4.7 million Americans are now claiming unemployment benefits, as of the week ending July 13. That number is down over 154,000 claims from the same week in 2012.

    New York saw the largest drop in unemployment claims for the previous week, with claims dropping nearly 15,000. The labor department cited fewer layoff in the transportation, construction, and educational service industries. Including New York, 22 states saw drops of more than 1,000 benefit claims over the previous week. Only California saw a massive benefit claim increase, up 7,723 from the previous week due to, the labor department states, large numbers of service industry layoffs.

  • Unemployment Benefits Claims Down From Last Year

    The U.S. Department of Labor this week revealed that initial claims for unemployment insurance benefits was down to 334,000 for the week ending July 13. That number is down 24,000 from the previous week, and down 48,000 from the same week one year ago.

    The numbers spark hope that the U.S. economy, or at least hiring numbers, is improving. The four-week moving average for unemployment insurance benefit claims is also down by more than 5,000 claims. There are now just over 4.5 million Americans claiming unemployment insurance benefits, down from over 5.75 million one year before.

    According to an Associated Press report on the Labor Department numbers, the good news could be tempered by an odd quirk of the automotive manufacturing industry. Though manufacturers normally shut down their factories during the first two weeks of July to prepare for a new run of updated models, the report states that manufacturers this year have kept factories moving due to high demand.

    The U.S. Bureau of Labor Statistics announced last week that 28 states saw an increase in unemployment rates during June, with only 11 states seeing a decrease. At the same time, payroll employment increased in 37 states. Nevada currently has the highest unemployment rate in the country with 9.6%, followed closely by Illinois (9.2%) and Mississippi (9%).

    (via Associated Press)

  • North Carolina Gives Up Federal Jobless Aid

    In a move designed to repay their Federal debt faster, the state of North Carolina has cut benefits to 170,000 workers within the state. As a result, they have put themselves in a position of not being eligible to receive Federal jobless benefits for people who have been employed for longer than six months.

    North Carolina has the fifth worst unemployment ranking in the U.S. Usually when a person has been on state unemployment for six months, they can then go on to a federally funded Emergency Unemployment Compensation. However, the rules for that program specify that the state can not cut the funds that they are paying to that person or the Emergency Unemployment Compensation program stops. North Carolina has now become the first state to do just that.

    The move comes in combination with an entire package of benefit cuts and tax increases on businesses. The decrease in benefits includes cutting the benefit period from six months to just three to five months. Qualifying for the benefits in the first place is more difficult. And the amount of the weekly benefit itself is reduced. For example, the maximum benefit anyone could ever be paid weekly has been $535 per week. That amount now tops out at $350.

    The changes will mean $3.6 billion in total benefit cuts and higher costs to employers through 2017, but 74% of that number is benefit cuts to workers.

    Some people will stop receiving unemployment benefits right away. Others will see their benefit amount reduced so drastically that they fear being able to meet basic necessities. In order to qualify for unemployment benefits in the first place, they had to have a record of work in the previous five quarters. They may have lost jobs due to economic downturn or to other disasters, such as a fatal explosion at the ConAgra Foods plant in Raleigh.

    According to the U.S. Department of Labor, no other state is even considering enacting the kind of legislation that North Carolina has, choosing to lose federal jobless benefits for their unemployed citizens.

  • Jobs Report Shows 155,000 New Jobs, Unemployment Holding Steady

    A new jobs report issued by the U.S. Bureau of Labor Statistics today showed that 155,000 new U.S. jobs were added in December 2012. Though this is good news for thousands of Americans, the news was tempered somewhat by the fact that the unemployment rate remained unchanged.

    The 155,000 new jobs were primarily added in the healthcare, food service, construction, and manufacturing industries. Hospitals and ambulatory health services companies continued to hire workers, together adding around 25,000 of the 45,000 jobs added in the health care sector. Restaurants and bars added 38,000 new workers, and the construction industry added 30,000. Manufacturers added 25,000 new employees in December, capping off a year in which factory employment rose by a total of 180,000 workers.

    Though employees are being hired, the number of unemployed Americans continues to hold steady. 12.2 million U.S. workers are currently counted as unemployed, a number that is actually slightly higher than the 12 million counted in November 2012. The unemployment rate also held steady at 7.8%, the same number the rate has been at for the last four months, excepting a small uptick to 7.9% in October.

    The unemployment numbers do look good when taking a longer view, however. The unemployment rate in December 2011 was at 8.5%, while the number of unemployed Americans was nearly one million higher, at 13 million.

  • Bill Clinton: Obama Can Get Us Back To “Full Employment”

    Bill Clinton will appear in a new television ad for President Obama’s campaign to back him up where job creation is concerned, saying he’s the candidate most likely to make it happen.

    The economy has been the biggest sticking point in this election year, with voters demanding to know what each man will do about unemployment once they’re in office. Clinton says that, for him, the election is strictly about which candidate is more likely to return America to full employment.

    “President Obama has a plan to rebuild America from the ground up. Investing in innovation, education and job training. It only works if there is a strong middle class. That’s what happened when I was president. We need to go with his plan,” Clinton says in the ad.

    He also takes aim at the Republican party for their plan to cut more taxes on upper income people and go back to deregulation, saying “that’s what got us into trouble in the first place”.

    Clinton supported Obama’s tax cuts plan a while back, appearing at a press conference with him regarding the plan.

    “I just had a terrific meeting with former president Bill Clinton, and we just happened to have this as a topic of conversation, and I thought that given the fact that he presided over as good an economy as we’ve seen in our lifetimes, that it might be useful for him to share some of his thoughts,” Obama said before turning the podium over to Clinton.

    During the conference, Clinton said he still spends about an hour a day trying to figure out the economy problem, even though he’s not running for any office. He also stated that even though he is in the income bracket which would benefit from the Republican’s plan, he didn’t think it was the best fit for the U.S.