U.S. jobs report
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Read This Before You Cheer the September U.S. Jobs Report
U.S. President Barack Obama is undoubtedly breathing a sigh of relief after the September U.S. jobs report showed the unemployment rate in the U.S. surprisingly trickled down to 7.8% from 8.1%.
That's the lowest level in 44 months - since January 2009, the same month President Obama took office.
But, the number of jobs added was shy of estimates, and the unemployment rate remains at an unhealthy and elevated level.
And as usual, there are scary statistics lurk behind that headline number.
"I take these numbers with an enormous grain of salt," economist Joshua Shapiro of consultancy MFR Inc. told The Wall Street Journal. "I think the underlying trend is pretty clear in terms of the labor market-that it's still struggling quite mightily."
The September U.S. Jobs Report: A Closer Look
U.S. Labor Department data released Friday revealed total nonfarm payroll employment increased by 114,000 workers last month, slightly missing economists' estimate of 115,000.
Total employment as measured by the government's household survey rose 873,000 in September.
But the bulk of the jobs added in September were for part-time workers, positions taken because of waning business conditions or because they were the only jobs those seeking work could find. The number of people who are working part time but want to be working full time rose by 582,000.
In addition, a great number of discouraged Americans have simply stopped looking for work or have exhausted unemployment benefits and fallen off the unemployment radar.
Also missing from the count is the out-of-work self-employed group. And a plethora of students are choosing additional education instead of work as a means to avoid a difficult job market.
Even if the "cooked" figure of 114,000 was accurate, it's still well below the minimum 125,000 jobs that need to be added every month just to keep up with population growth.
"When you look at the payroll numbers, they are bumping along where we have been around this 100,000 level, which is not enough to consistently reduce the unemployment rate. The overall message is one of plodding along. It's OK, it's not disastrous, but it's nowhere near where the Fed wants to be," Lee Ferridge, head of macro strategy for North America at State Street Global Markets stressed to CNBC.
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Why the U.S. Jobs Report Could Be Much Worse than Expected
The September U.S. jobs report, the second to last before Election 2012, is expected to show 110,000 jobs added for the month - but there's a chance it could be much uglier.
First, the weekly initial jobless claims out today (Thursday) increased 4,000 to 367,000 for the week ended Sept. 29. Never a good lead in to a jobs report.
Second, the ADP jobs report released Wednesday showed the private sector added 162,000 jobs in September, less than the 189,000 added in August. ADP's report is often skewed to the upside compared to the government's employment numbers.
Data shows that between April and August, ADP estimated nearly 50,000 more private sector jobs were added per month than the government report (widely viewed as more accurate).
But in August, ADP's number overshot the government's by a hefty 98,000.
Equally disturbing is that the number of jobs being added (according to government figures) is nowhere near what is considered healthy. Just to keep up with population growth, our economy needs to add at least 125,000 jobs every month.
At that pace, it would take at least four more years for the U.S. job market to fully recover from the Great Recession.
"We're not going anywhere quickly in the jobs market," Ryan Sweet, senior economist at Moody's Analytics, Inc., told Bloomberg News. "The job market is just more of the same. Layoffs aren't the big problem, it's the lack of hiring."
The number of jobs employers added in August was an uninspiring 96,000, a steep decline from July's 141,000.
And while the unemployment rate eked down to 8.1% from 8.3% the previous month, it was for all the wrong reasons.
Many discouraged Americans have given up looking for a job. Plus, more young adults are prolonging their education in attempts to avert entering a very difficult job market.
And with the following factors, 2013 looks to get even worse.
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Recession 2013 Looks More Likely After Weak Jobs Report
Every politician promises "more jobs" for the American people. This has been the foundation of virtually every speech at the conventions for both parties.
But what we really need are "more quality jobs" - especially if we want to steer the country away from Recession 2013.
Unfortunately, quality jobs don't seem to be around.
Last Friday's U.S. jobs report showed that only 96,000 new jobs were created in the United States in August when 130,000 were expected. That's dismal enough, but a closer look at the numbers shows just how bad U.S. unemployment is.
Turns out the biggest job increases have been in food services and drinking places, which added 28,000 jobs in August and 298,000 over the past year.
MIT labor economist David Autor said posting gains in areas like these doesn't translate to sustainable, quality job growth.
"They're numerous, but they don't tend to be highly paid," said Autor. "They don't have a lot of job security."
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Ugly August U.S. Jobs Report Made Romney's Day
From numerous angles, the August U.S. jobs report was disappointing - except for GOP presidential hopeful Mitt Romney, who used the numbers to blast U.S. President Barack Obama.
The Labor Department reported today (Friday) that U.S. employers added a paltry 96,000 jobs last month.
Unemployment and the economy are two of the most prominent issues of this year's campaign, and Romney seized the opportunity to stake a political advantage following the dreary news.
"If last night was the party, this morning is the hangover. For every net new job created, nearly four Americans have given up looking for work entirely," Romney said in a statement.
He continued stating that President Obama has not made good on his promises, and reiterated the message that the United States is no better off than it was four years ago when the president took office.
Romney pledged to create some 12 million new jobs by the end of his first term.
In a rally cry Romney said, "America deserves new leadership that will get our economy moving again."
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August U.S. Jobs Report Critical for President Obama
The August U.S. jobs report is critical on many levels.
Due out tomorrow (Friday) by the U.S. Labor Department, the August report isn't expected to be enough to lower the U.S. unemployment rate.
An uninspiring 120,000 jobs are expected to have been added in August, according to a CNNMoney survey, a notable slowdown in hiring from July's seasonally adjusted 163,000.
July's number was the strongest showing in five months, yet it still was not vigorous enough to keep up with population growth. The unemployment rate actually ticked up a notch to an unhealthy 8.3%.
Here are two reasons tomorrow's U.S. jobs report is a biggie.
August U.S. Jobs Report: What's at Stake?
- President Obama's Obstacle
The employment report comes just weeks before the November presidential election. President Obama and his administration have long been blamed for the stagnant and elevated unemployment level, the lack of job creation and as a result, the slow going economy.
With just three more monthly jobs reports due out prior to the November election, Team Obama could certainly use a boost from better-than-expected numbers. The president is treading at break-even level on jobs and it is very doubtful that the unemployment rate will fall below 8% by then.
"The soft economic environment that we're having is not going to be good for any incumbent. It's a tough sell for anyone in office," Sam Bullard, a Wells Fargo senior economist told CNN Money.
No incumbent president has won re-election with an unemployment rate greater than 7.2% since FDR's rein.
On the other side of things, according to a piece in Business Insider, a top Wall Street source who backs presidential hopeful Mitt Romney said a robust showing in Friday's report bodes well for President Obama. "If the number is good Friday it doubles his [President Obama's] bounce. Maybe triples it. If it comes in really low, it could extinguish it. I don't think there's ever been a more important jobs number, politically, than this one."
If the report nearly meets or matches the expected 120,000, it "won't matter as much" according to the source.
- President Obama's Obstacle
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July's U.S. Jobs Report a "Hammer-Blow" to President Obama's Re-Election Bid
After three months of weak job creation, a better-than-expected reading in July's U.S. jobs report was welcome, but still isn't anything to get too excited about. Despite the encouraging job gains, the unemployment rate actually ticked up.
The Labor Department reported U.S. payrolls increased by a seasonally adjusted 163,000 jobs in July, better than the 95,000 economists had expected. But, in a separate survey of U.S. households, numbers revealed the unhealthy unemployment rate actually eked up, rising from 8.2% to 8.3%.
"Today's increase in the unemployment rate is a hammer blow to struggling middle-class families," GOP presidential hopeful Mitt Romney said in a statement.
With the November presidential election growing near, the jobs report carries massive political weight.
Not since World War II has an incumbent president attempted re-election with an employment rate over 8%. Since President Obama took office, the unemployment rate has remained elevated and above that key level.
And it's not likely to go down before November.
"We've now gone 42 consecutive months with the unemployment rate above 8 percent," Romney said in a statement. "Middle-class Americans deserve better, and I believe America can do better."
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June U.S. Jobs Report Ends Bleak Second Quarter
June's U.S. jobs report released today (Friday) deflated the brief celebratory mood that followed Thursday's upbeat employment data, and ended a second quarter packed with weak economic figures.
The U.S. Labor Department reported Friday that employers added a skimpy 80,000 jobs in June, much less than analysts' estimates of 100,000-125,000. The jobless rate remains at an elevated 8.2%.
The fresh data concludes a dismal second quarter.
In the first quarter of 2012, the average number of monthly jobs created was 226,000. In the second quarter that average fell to a measly 75,000. While job gains in April and May deviated little from estimates, June's data was significantly lower than anticipated.
"Today's report is the rotten cherry atop the half-baked economic news of the last few months," TD Bank's Chris Jones said in a note.
Roughly one-third of the jobs added in June were in temporary services. Manufacturing added 11,000, marking its ninth straight month of gains, while growth in factory jobs dropped off sharply in the second quarter. Healthcare jobs grew by 13,000 and financial services added 5,000. Meanwhile, retailers, transportation firms, and the government slashed jobs.
Friday's lackluster report came on the heels of some encouraging data.
On Thursday, ADP's employment report showed that private employers added 176,000 jobs in June -- far exceeding economists' expectations of 95,000. Small businesses and service firms were responsible for most of the gains.
Another optimistic sign Thursday was the decline in the number of first-time applicants for jobless benefits. First-time claims dipped by 14,000 to 373,000, while the four-week average slid by 1,500 to 385,000.
Any optimism had faded Friday after the U.S. jobs report came out. The Dow Jones was down more than 180 points by noon.
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Warren Buffett, Bill Clinton Sound off on "Recession 2013"
As concerns mount that the United States is headed for a recession, two famous minds offered opposing takes on what's in store for the U.S. economy.
In one corner was the Oracle of Omaha, Warren Buffett; in the other, the 42nd President of the United States, Bill Clinton.
Speaking at the 25th anniversary dinner of the Economic Club of Washington, Buffett said that it is unlikely the U.S. economy will fall into another recession. He said the chances of that happening are "very low."
Buffett, who blames both political sides for the budget deficit, once again called for raising taxes and cutting spending.
"The problem is the Democrats don't want to talk about what expenditures they would cut and the Republicans don't want to talk about raising revenues," he said.
Buffett said "the big question" remains what's ahead for the euro.
"We've got this system where they're half in and half out," said Buffett, who is currently auctioning off a lunch with himself this week on eBay for charity. "They have to reconcile these things."
Reflecting on the Eurozone he said there is the possibility the U.S. will feel a "spill over" effect from Europe - which some would argue has already happened.
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