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Getbig Main Boards => Politics and Political Issues Board => Topic started by: Soul Crusher on June 03, 2009, 06:10:59 AM
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ADP Estimates U.S. Companies Cut Payrolls by 532,000 (Update2)
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By Courtney Schlisserman
June 3 (Bloomberg) --
Companies in the U.S. cut an estimated 532,000 workers from payrolls in May as the labor market showed little sign of improving even as the recession abated, a private report showed today.
The drop in the ADP Employer Services gauge was higher than economists forecast. April’s reading was revised to show a reduction of 545,000 workers, up from a previous estimate of 491,000.
Companies from General Motors Corp. and Chrysler LLC to American Express Co. continue to cut jobs to control costs even as the economy shows signs of stabilizing. Mounting unemployment will restrain consumer spending, muting any recovery.
“Still losing over half a million jobs a month is hard to get excited about,” Derek Holt, an economist at Scotia Capital Inc. in Toronto, said in a note to clients. “Steep job losses still signal a deeply troubled economy.”
Economists forecast the ADP report would show a decline of 525,000 jobs, according to the median of 28 estimates in a Bloomberg News survey. Projections ranged from decreases of 425,000 to 580,000.
A government report on June 5 may show payrolls at companies and government agencies shrank by 520,000 in May and unemployment rose to a 25-year high of 9.2 percent, according to a Bloomberg survey of economists.
Smaller Gain
Job-cut announcements last month showed the smallest increase in more than a year, Chicago-based placement firm Challenger, Gray & Christmas Inc. also said today. Planned firings rose to 111,182, up 7.4 percent from May 2008. The rise was the smallest since firings last dropped in February 2008.
Today’s ADP report showed a reduction of 267,000 workers in goods-producing industries including manufacturers and construction companies. Employment in manufacturing dropped by 149,000. Service providers cut 265,000 workers.
Companies employing more than 499 workers shrank their workforces by 100,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 223,000 jobs and small companies decreased payrolls by 209,000.
“Despite some recent indications that economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months,” Joel Prakken, chairman of Macroeconomic Advisers, said in a statement.
The ADP report is based on data from 500,000 businesses. ADP began keeping records in January 2001 and started publishing its numbers in 2006.
-- With assistance from Vivek Shankar in San Francisco. Editor: Carlos Torres
To contact the reporter on this story: Courtney Schlisserman in Washington cschlisserma@bloomberg.net.
Last Updated: June 3, 2009 08:43 EDT
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Green shoots abound.
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“Despite some recent indications that economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months,” Joel Prakken, chairman of Macroeconomic Advisers, said in a statement.
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A half million jobs lost each month, month after month , has many terrible effects on overall economic activity.
The only thing propping up the economy right now is the Federal Reserve's printing press.
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Are you saying Obama's economic policies are stabilizing the economy?
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Many repubs hoped obama would fail.
The dow is steady, we're making moves to stabilize the slide obama collapsed.
it's been 120 days of Obama reign and the sky hasn't fallen yet. Every day the sky doesn't fall, they get more pissed.
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Many repubs hoped obama would fail.
The dow is steady, we're making moves to stabilize the slide obama collapsed.
it's been 120 days of Obama reign and the sky hasn't fallen yet. Every day the sky doesn't fall, they get more pissed.
Your unbelievable. Things dont collapse in one day, but we are racing to over 10% UE very fast despite the stimulus.
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And we'd be getting there faster without the stimulus. That's why there was a stimulus.
As was posted above, the economy is stabilizing. Employment figures usually trail the economy.
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Are you saying Obama's economic policies are stabilizing the economy?
Im saying that he is placing a bandaid over a gapping wound by printing endless fiat money. Of course spending trillions of fiat money is going to temporarily help things, but it is only delaying inevitable and kicking the can down the road into even bigger problems once inflation hits and other countries decouple from the dollar, as already has been threatened.
I posted a story today already how the Chinese laughed at Geithner over his remarks about the dollar and budget deficit.
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Your unbelievable. Things dont collapse in one day, but we are racing to over 10% UE very fast despite the stimulus.
maybe we should let GM and CITI and AIG collapse. that would bring unemployment back down to 5%, right?
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HERE YOU GO!
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Bernanke Warns Deficits Threaten Financial Stability (Update1)
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By Craig Torres and Brian Faler
June 3 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said large U.S. budget deficits threaten financial stability and the government can’t continue indefinitely to borrow at the current rate to finance the shortfall.
“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,” Bernanke said in testimony to lawmakers today. “Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”
Bernanke’s comments signal that the central bank sees risks of a relapse into financial turmoil even as credit markets show signs of stability. He warned the financial industry remains under stress and the credit crunch continues to limit spending.
The Fed chief said in his prepared remarks to the House Budget Committee that deficit concerns are already influencing the prices of long-term Treasuries.
Yields on 10-year notes have climbed about 1 percentage point since the Fed announced plans in March to buy $300 billion of long-term government bonds. The notes yielded 3.57 percent at 10:34 a.m. in New York, down from 3.61 percent late yesterday.
Rise in Yields
“In recent weeks, yields on longer-term Treasury securities and fixed-rate mortgages have risen,” Bernanke said. “These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows and technical factors related to the hedging of mortgage holdings.”
The budget deficit this year is projected to reach $1.85 trillion, equivalent to 13 percent of the nation’s economy, according to the nonpartisan Congressional Budget Office.
Bernanke also addressed banks’ efforts to bolster common equity in the aftermath of regulators’ stress tests on the 19 largest U.S. lenders. He said the 10 firms that were found to have a total capital shortfall of $75 billion have now sold or announced plans to boost common equity by $48 billion.
“We expect further announcements shortly” as the banks submit plans due by June 8, Bernanke said.
This year’s projected budget deficit, four times the size of last year’s shortfall, has been driven up mostly by costs associated with the financial crisis.
Causes of Deficit
A fiscal stimulus of almost $800 billion, the government’s financial rescue effort, takeovers of Fannie Mae and Freddie Mac and increased costs of running safety-net programs such as unemployment insurance have added billions to spending.
President Barack Obama has pledged to halve the deficit by the end of his term. Even if successful, his administration anticipates the government will still run what would be, by historical standards, large deficits for the foreseeable future. Bernanke said the debt-to-gross domestic product ratio is set to reach the highest since the 1950s.
Treasury Secretary Timothy Geithner, in an interview with Bloomberg Television May 21, said the administration’s goal is to cut the budget shortfall to 3 percent of GDP or smaller.
Rising government spending, forecasts for a record fiscal deficit and an unprecedented expansion of central bank credit have also fueled investor concerns that inflation will rise. Bernanke said inflation “will remain low” as the economy operates with slack resource use.
‘Dangerous’ Mix
Wisconsin Representative Paul Ryan, the ranking Republican on the committee, said in opening remarks that the Treasury’s debt issuance and the Fed’s monetary stimulus, including purchases of government bonds, “can be a dangerous policy mix” and risks “runaway inflation” in the longer term.
Ryan said he’s concerned about “substantial” political pressure on the Fed to delay plans to tighten credit should unemployment remain high.
“The Fed’s political independence is critical and essential for safeguarding its commitment to price stability,” Ryan said. “We policy makers should realize that our most challenging policy period is going to be ahead of us.”
In Europe, German Chancellor Angela Merkel yesterday she views “with great skepticism what authority the Fed has and the leeway the Bank of England has created for itself,” to purchase a range of assets in their efforts to end the crisis. She urged central banks to return to a “policy of reason.”
Bernanke said the economy is likely to suffer more “sizable” job losses, which will weigh on consumer spending. Still, Fed officials are looking for a recovery in growth later this year as housing demand stabilizes and companies balance inventories with overall demand.
Fed Purchases
The central bank is buying as much as $1.75 trillion of housing debt and Treasuries this year to lower borrowing costs across the economy after reducing the benchmark interest rate almost to zero in December. Fed officials hold their next policy meeting June 23-24 in Washington.
Bernanke reiterated the Fed will “soon” begin disclosing more information on its lending as part of efforts to “enhance” the central bank’s transparency. The Fed will issue monthly reports with “considerable new information concerning the number of borrowers at our various facilities, the concentration of borrowing, and the collateral pledged,” the chairman said.
That would fall short of demands by some lawmakers, including Vermont Senator Bernie Sanders, the independent who in April won Senate approval of a nonbinding resolution asking the Fed to identify borrowers.
To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net
Last Updated: June 3, 2009 10:40 EDT
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A half million jobs lost each month, month after month , has many terrible effects on overall economic activity.
The only thing propping up the economy right now is the Federal Reserve's printing press.
The IRS reported a 40 percent decline in revenue, so the unemployment in america is in far more DIRE CONDITION than is being reported
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The IRS reported a 40 percent decline in revenue, so the unemployment in america is in far more DIRE CONDITION than is being reported
No kidding. Dont bother some of the sycophants with details like that.
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From this morning's Wall Street Journal. It contains a lot of the same information as the story you posted, but is also contains a lot more quotes from Bernanke, a lot more context and a clearer perspective of our overall economic picture. Pay special attention to the bolded text.
http://online.wsj.com/article/SB124403584900281215.html
Bernanke Urges Deficit Reduction, Sees Growth This Year
WASHINGTON -- Federal Reserve Chairman Ben Bernanke Wednesday urged lawmakers to commit to reducing the nearly $2 trillion budget deficit, warning that the government can't borrow "indefinitely" to meet the growing demand on its resources.
Mr. Bernanke also reiterated that the pace of economic contraction appears to be slowing, setting the stage for a return to growth later this year. But that growth won't be robust, he said.
"Unless we demonstrate a strong commitment to fiscal sustainability in the longer run, we will have neither financial stability nor healthy economic growth," Mr. Bernanke said in prepared testimony to the House Budget Committee. (Read the full remarks.)
He also told lawmakers that the Fed won't accommodate wider budget deficits by simply printing money, saying the central bank "will not monetize" the federal debt.
The White House estimates the budget deficit will reach about $1.8 trillion this year and narrow to about $900 billion by 2011. That, Mr. Bernanke said, will push the debt-to-GDP ratio to 70% by 2011 from 40% before the financial crisis began, which would be the highest since after World War II.
"Certainly, our economy and financial markets face extraordinary near-term challenges, and strong and timely actions to respond to those challenges are necessary and appropriate," Mr. Bernanke told the House panel.
However, the retirement of the Baby Boom generation will place even more of a burden on entitlement programs like Social Security and Medicare, and "we will not be able to continue borrowing indefinitely to meet those demands," he said.
Mr. Bernanke suggested that fiscal concerns may already be having an effect in the markets. Yields on longer-term Treasury securities and fixed-rate mortgages have risen, he noted.
"These increases appear to reflect concerns about large federal deficits but also other causes, including greater optimism about the economic outlook, a reversal of flight-to-quality flows, and technical factors related to the hedging of mortgage holdings," he said.
Mr. Bernanke adhered closely to the Fed's cautiously upbeat outlook for the economy. Consumer spending, he said, has been flat since the start of the year and sentiment has improved. Housing, he said, "has also shown some signs of bottoming" and lean inventories should eventually spur production.
Still, he cautioned that even when an upturn begins, growth will remain below its long-run potential "for a while."
"Sizable" job losses, he said, should continue for "the next few months," pushing the unemployment rate higher. The government releases May payroll figures Friday. Economists expect another payroll decline of over 500,000, raising the jobless rate past 9%.
Against that backdrop of widening economic slack, inflation should fall over the next year compared with 2008, Mr. Bernanke said, though an improving economy and stable inflation expectations "should limit further declines in inflation."
Meanwhile, Mr. Bernanke said the ability of banks to raise new capital "suggests that investors are gaining greater confidence in the banking system."
But while financial conditions have improved since the start of the year, they remain under stress and continue to act as a brake on the economy, he said.
Responding to questions from the panel members, Mr. Bernanke also said the government's efforts last year to inject capital into the banking system helped the U.S. avert a "calamity" in the financial system.
He told lawmakers that the Fed will release a list of banks next week that it thinks are eligible to repay loans they received under the Troubled Asset Relief Program.
He also noted that the U.S. current-account deficit has shrunk despite higher government borrowing, an indication that there is enough capital available to meet the government's financing needs.
Tuesday, German Chancellor Angela Merkel sharply criticized the recent liquidity policy of the Fed, calling for a return to what she called "sensibility." Asked to respond, Mr. Bernanke said he "respectfully" disagreed with her views.
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Here is the problem, the number simply dont add up.
Obama's budget is based on 4 to 5% growth THIS YEAR as far as his deficit figures are concerned.
Even the CBO said Obama's numbers dont add up.
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You manage to re-define the problem with every post.
It doesn't matter if the numbers add up. Projections aren't scientific theorems. The goal is to make sure things improve. Everything in this thread points to a stabilizing, improving economy- even the stuff you posted to prove otherwise.
The Fed Chairman himself said that the stimulus package managed to avert a crisis.
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You manage to re-define the problem with every post.
It doesn't matter if the numbers add up. Projections aren't scientific theorems. The goal is to make sure things improve. Everything in this thread points to a stabilizing, improving economy- even the stuff you posted to prove otherwise.
The Fed Chairman himself said that the stimulus package managed to avert a crisis.
The TARP did that, not the stimulus bill.
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You got me...
Meanwhile, the rest of the post stands.
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And we'd be getting there faster without the stimulus. That's why there was a stimulus.
As was posted above, the economy is stabilizing. Employment figures usually trail the economy.
Not quite. The Stimulus money has only begun to trickle into the economy. Most will be put into action in the next few years as was planned. There is def. some cyclical economic events happening as well.
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And we'd be getting there faster without the stimulus. That's why there was a stimulus.
As was posted above, the economy is stabilizing. Employment figures usually trail the economy.
The stimulus money hasnt even begun to roll in yet. We would have gotten there atleast as fast without the stimulus, and without $1 trillion in extra debt, and with a stronger dollar, and lower oil prices. Yes, the stock market has finally stabilized. Thank GOD. But it had already been stabilizing in early January before Obama took office, then he passed the PORKULUS bill and revealed his budget, and the market crashed another 22%. Have you seen oil prices recently? I know theyre not exactly high yet, but should they be increasing the way they have for the past month or so when we STILL have 4 months of job losses to go? Its not just oil but other commodoties as well. As far as I am concerned, stagflation is already here.
Barack Obama has already single handedly resurected the Republican Pary. That's the good news for me because Im a Republican, but the bad news for our country is that America will suffer over the next 2-4 years. This may be hard for some of you to beleive, but I would much rather have it the other way around. I dont enjoy seeing my gas prices rise without a corresponding increase in profits.
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The stimulus money hasnt even begun to roll in yet. We would have gotten there atleast as fast without the stimulus, and without $1 trillion in extra debt, and with a stronger dollar, and lower oil prices. Yes, the stock market has finally stabilized. Thank GOD. But it had already been stabilizing in early January before Obama took office, then he passed the PORKULUS bill and revealed his budget, and the market crashed another 22%. Have you seen oil prices recently? I know theyre not exactly high yet, but should they be increasing the way they have for the past month or so when we STILL have 4 months of job losses to go? Its not just oil but other commodoties as well. As far as I am concerned, stagflation is already here.
Barack Obama has already single handedly resurected the Republican Pary. That's the good news for me because Im a Republican, but the bad news for our country is that America will suffer over the next 2-4 years. This may be hard for some of you to beleive, but I would much rather have it the other way around. I dont enjoy seeing my gas prices rise without a corresponding increase in profits.
Exactly. The Stimulus Bill was designed to have the money flooded out over the next few years....right in time for the election. It will go far in buying and holding constituencies. Also, we, in part, would have made it this far with JUST the Tarp and not that disgusting blood money bill. In the short-term the media will get this totally wrong and trumpet Obama and all that bullshit. Economists will know better but will totally be ignored. In the long term the threat of our catastrophic welfare spending, entitlements, bailouts, health care, and the inevitable rise in much of our taxes and interests rates when the inflation starts to rumble will prove to be the real killer. But I'm sure that a solution to that future problem is another massive stimulus and giant federal program away.
Food for thought: Even with taxing health benefits, a new fuel tax, more general taxes and cap/trade we will STILL only be talking about "narrowing" the deficit. This is how insane this all is. All the new taxes the Democrat's can dream up, and they will, and we are still only talking about NARROWING the deficit and not even reducing our debt.
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Exactly. The Stimulus Bill was designed to have the money flooded out over the next few years....right in time for the election. It will go far in buying and holding constituencies. Also, we, in part, would have made it this far with JUST the Tarp and not that disgusting blood money bill. In the short-term the media will get this totally wrong and trumpet Obama and all that bullshit. Economists will know better but will totally be ignored. In the long term the threat of our catastrophic welfare spending, entitlements, bailouts, health care, and the inevitable rise in much of our taxes and interests rates when the inflation starts to rumble will prove to be the real killer. But I'm sure that a solution to that future problem is another massive stimulus and giant federal program away.
Food for thought: Even with taxing health benefits, a new fuel tax, more general taxes and cap/trade we will STILL only be talking about "narrowing" the deficit. This is how insane this all is. All the new taxes the Democrat's can dream up, and they will, and we are still only talking about NARROWING the deficit and not even reducing our debt.
100% Obama is reckless spendthrift and the posts from his sycophants on these boards NEVER adress the reality of the math.
Here is what they respond with:
1. Bush sucked too
2. Bush sucked too.
3. He inhereited this mess.
4. Bush sucked too.
5. Your a RW nut.
6. Europe is the best.
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Did anyone even mention Bush in this thread?
You started a thread presumably to gloat over a weakening job market, even though most sources indicate the an overall economic upturn on the horizon.
You literally changed your argument with every post in this thread. Yet anyone who doesn't share adhere to your ever-shifting theories is a sycopant?
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Did anyone even mention Bush in this thread?
You started a thread presumably to gloat over a weakening job market, even though most sources indicate the an overall economic upturn on the horizon.
You literally changed your argument with every post in this thread. Yet anyone who doesn't share adhere to your ever-shifting theories is a sycopant?
Im talking about the fact that when anyone tries to discuss the insane level of spending going on, and the proposed taxation, the typical response is what i mentioned.
Bush started this recklessness on a whole new level with the TARP and bailouts, and Obama simply ran with it doubly fast.
Its not a right v. left thing, its a common sense view as to what is going on and the denial many are still in.
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You started a thread presumably to gloat over a weakening job market, even though most sources indicate the an overall economic upturn on the horizon.
Its not the job losses that bother me so much. That is a part of the natural order of things. But the rising oil and commodity prices should not be happening right now. Job losses are easy to deal with, but inflation is an absolute killer. It is hard to get control of, and in order to kill massive inflation you have to cause another recession like we had to do in the early 80s.
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Bush started this recklessness on a whole new level with the TARP and bailouts, and Obama simply ran with it doubly fast.
Its not a right v. left thing, its a common sense view as to what is going on and the denial many are still in.
I freely admit that it is still a right vs. left thing for me. TARP may have been the wrong thing to do in retrospect, but it was something that very smart poeple disagreed on. About half of free market economists supported it. But anyone with a brain knew that PORKULUS was a disaster. Now, Bush definately made the wrong decision in bailing out GM, but politically you can understand why he did it with all the ignorant sheep out there.
Bush did spend too much money and conservatives criticized him for it. Liberals were not criticising him for it at the time; they were only criticising him for the tax cuts (even though there was plenty of revenue coming in. I dont understand liberals logic on this. Do they ever think about these sort of things?) Now all of a sudden they are mentioning Bush's spending as a comeback to the criticism that Obama is spending 5 times as much as Bush did. I wish I was able to use these sort of baseless arguments!! Bush did spend to much money but it was MANAGABLE.
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The Market Ticker
by: Karl Denninger
The banks are still carrying these "assets" at well-above their actual market value. This means their balance sheets are showing them to be healthier than they really are.
The Government, which claimed it was going to "drain the swamp" and get the market moving again, tried everything short of the barrel of an M-16 in the mouth of people like Blankfein and Pandit, but couldn't get them to sell.
But rather than force the recognition of market prices on the balance sheets, which would force these banks to either sell or be FDIC'd (incidentally, the only correct pair of options the banks should have) the government instead is allowing the banks to continue to lie about the market value of these "assets" and carry them above what the market will pay - that is, they are allowing the continuing intentional distortion of so-called "book value", reserve ratios and soundness
Of course this isn't how the government banking cartel (the same so-called "regulators" that allowed and even encouraged book-cooking when it came to reserves and deposits) sees it:
F.D.I.C. officials portrayed the change as a sign that banks were returning to health on their own.
Baloney. If the banks were returning to health on their own they wouldn't care if the market price was recognized on their balance sheets.
The FDIC is lying.
But some analysts said the banks’ reluctance to clean up their balance sheets meant they were merely postponing their day of reckoning. Indeed, some analysts said government policies had made it easier for banks to gloss over their bad loans.
"Gloss over" is another fancy word for fraudulent accounting practices, all made "legitimate" by our government.
No one knows exactly how many losses are buried in the troubled mortgages on banks’ books, but some analysts estimate that the unrecognized losses total more than $1 trillion. Under accounting rules, banks do not have to write down the value of most mortgages unless they sell them or they fall delinquent.
And, as Wells Fargo did last year, they can change the rules on when something is "delinquent"! That is, it can be 30 days behind today, 60 tomorrow, and three years next week. That's all ok, according to our so-called "regulators."
The Federal Reserve also is pumping hundreds of billions of dollars into mortgage-backed securities, and into other kinds of consumer and business lending. Starting next month, the Fed plans to offer cheap financing for investors who want to buy “legacy” securities backed by mortgages on commercial real estate.
Of course this simply means that the Federal Reserve (that is, you) will eat the loss.
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Its not the job losses that bother me so much. That is a part of the natural order of things. But the rising oil and commodity prices should not be happening right now. Job losses are easy to deal with, but inflation is an absolute killer. It is hard to get control of, and in order to kill massive inflation you have to cause another recession like we had to do in the early 80s.
The action in the oil market may be exuberant right now, but there is nothing especially irrational about it. It seems like you have more of a financial background than I do, so I can only assume that you are being willfully obtuse. Commodities usually rise in anticipation of inflation because they're insulated from its effects. According to a lot of analysts, the credit crisis caused an overreaction in the oil market, so part of the precipitous increase in its price can actually be attributed to a correction. The oil market isn't just reacting to the American economic outlook, but the global economic picture. These aren't signs of stagflation, and certainly nowhere near the level of the 70s.