The jobs picture still looks sour, but there could be light at the end of the tunnel.
The bad news: The private sector slashed more jobs than expected in August, reversing a sixth-month trend of job gains. The good news: Overall employers announced fewer planned job cuts.
Private sector employers cut 10,000 jobs in August — a drop from the downwardly revised 37,000 jobs they added the month before, according to a report by payroll processing firm Automatic Data Processing.
Those cuts were worse than predicted. Economists polled by Briefing.com had expected the report to show 13,000 jobs added in August.
While jobs statistics are often a volatile measure, the drop is still enough to "heighten fears about a double-dip recession," Paul Ashworth, senior U.S. economist with Capital Economics said in a note to investors.
After the report was released, stock futures dipped slightly, but then rebounded as stocks popped up at the opening bell.
Job losses in the goods producing sector dragged down the entire measure, while the services sector actually saw a boost in employment. Both the construction and financial services industries cut jobs in August, continuing a three-year downward trend in those sectors.
ADP looks backward at the month, compiling data from actual payrolls. But earlier on Wednesday morning, a separate report showed employers’ plans for future job cuts sunk to a 10-year low during the month.
After rising for three months in a row, planned job cuts plummeted to 34,768 in August, the lowest level since June 2000 and down 17% from the previous month, according to outplacement firm Challenger, Gray & Christmas Inc.
Compared to a year ago, downsizing activity dropped 55% in August, and job cuts have eased 65% so far this year compared with the same period last year.
"Every other job market indicator seems to be stuck in first gear," said John Challenger, CEO of the firm. "In contrast, the layoff picture has improved so significantly that we are at pre-dot-com collapse levels when it comes to monthly job-cut announcements."
The separate jobs reports use different metrics, with ADP measuring only private sector job growth and Challenger compiling planned job cuts in the government and non-profit sectors as well as private industry.
"The two reports in combination give us a glimpse of exactly where we’re at: companies have stopped firing, but are not yet hiring," said Adrian Cronje, chief investment officer of investment firm Balentine.
Private sector businesses are holding cash on their balance sheets, he said, but are not hiring due to an uncertain outlook about future tax rates and fiscal policy.
According to Challenger, the industrial goods sector announced the most job cuts in August, but looking year-over-year, job cuts in the sector were down significantly overall.
The Challenger report also showed the government and non-profit sector shed the most jobs this year, accounting for 30% of all 2010 job cuts and eliminating three times more jobs than the pharmaceutical sector, which reported the second highest number of year-to-date cuts.
ADP and Challenger’s numbers set the stage for the government’s closely watched jobs report due Friday. Economists are expecting the report to show there were 120,000 jobs lost in August, an improvement over July’s 131,000 job loss.
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A majority of businesses in New York are optimistic about the prospects for economic recovery — but it doesn’t meant they’ll be hiring soon.
So says a new survey from The Business Council of New York State, a 3,000-member lobby in Albany that includes many of the state’s largest employers.
"Our members believe their businesses will grow and their bottom lines will improve over the next 18 months," says Ken Adams, president and CEO of the Business Council. "They are not reaching for any champagne yet, but they see economic improvement ahead in 2011."
About 300 of the lobby’s members responded to the electronic survey done in July.
Of that group, 41 percent expect revenue to grow over the next six months. That figure jumps to 59 percent when asked about expectations over the next 12 to 18 months.
But it appears the revenue growth will not coincide with big jumps in new hires.
A full 60 percent of respondents said they will keep their workforces the same size over the next six months, compared with 27 percent who plan to hire.
Employers were also asked about hiring plans over the next 12 to 18 months. Just more than half said they will not expand their workforces during that time, compared with 40 percent who plan to increase their head counts.
Employers in The Business Council survey were unanimous in their opinion of state government.
No employers said they were satisfied with the way state government is operating. Thirteen percent said they were somewhat dissatisfied, while 87 percent said they were not satisfied at all.
Also, close to 80 percent of respondents said they’d seen an increase in state regulatory activities that come with fines, fees or penalties.
A majority of respondents said neither their state senators nor their state assembly members deserve re-election this fall.
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Core-Mark Holding Company Inc. said Friday it agreed to acquire Finkle Distributors Inc. for about $43 million.
South San Francisco-based Core-Mark (NASDAQ:CORE) is a marketer of packaged produce for convenience stores in North America.
FDI, which is based in Johnstown, N.Y., is a convenience wholesaler with customers in New York, Pennsylvania and surrounding states.
Dan Finkle, president of FDI, will join Core-Mark no fax payday loan.
Core-Mark expects to fund the transaction from a combination of cash and borrowings under its $200 million revolving credit facility. The deal is expected to close in August and be accretive in 2010 excluding approximately $2.6 million in start up and conversion costs.
New York Gov. David Paterson, as promised, has started vetoing 6,900 spending items included in a budget plan approved Monday by the Senate and Assembly.
In all, Paterson will ax more than $600 million in spending approved by legislators in votes on Monday. Paterson called the spending a “gimmick” and said legislators were “self-serving” and “fantasizing” that certain revenue would materialize.
The largest items to go: $419 million of extra money for K-12 education, plus close to $200 million in grants, mostly for nonprofits. The budget votes, though, avoid a government shutdown.
Paterson’s vetoes mean legislators will have to hold another vote on the spending to override it. An override in the Senate appears unlikely, as 10 Republicans would have to vote with all 32 Democrats to overcome the veto with the required two-thirds majority.
Another contentious vote is on tap today, as legislators hold session to vote on a plan to generate nearly $1 billion of new revenue to help erase the state’s $9.2 billion deficit and pay for spending in the budget.
The bill is the last significant piece of the state budget yet to be acted on—capping a disjointed and piecemeal budget process three months after a budget was due.
This bill, like the ones voted on Monday, is the product of a deal brokered between Democrats in the Assembly and Senate. The budget plan contains fewer spending cuts than Paterson’s original $135 billion proposal, laid out back in January.
At this point, it remains unclear how much money the state will spend this fiscal year, which runs through March 2011.
The revenue bill up for a vote today forces businesses to defer $1.1 billion of their tax credits over the next three years. They’ll be unable to begin tapping that money until 2013.
The state will also charge sales taxes on clothing and footwear purchases of less than $110 from October 2010 through March 2011, raising $330 million.
In addition, the bill hikes taxes on hedge fund managers living out-of-state, cuts the number of charitable donations the wealthiest New Yorkers can claim on tax returns and boosts an annual tax credit given mostly to filmmakers downstate by $85 million, to a total of $505 million low rate payday loans.
On Monday night, Paterson blasted legislators for their budget plan. He had promised to veto certain spending if legislators failed to create a safety net in case close to $1 billion of federal funds do not come through.
The Medicaid reimbursement funds have been in doubt for weeks, tied up in debate in Congress. Without the money, the state’s deficit would jump to $10.2 billion—requiring legislators to return to Albany later this year, during an election campaign, if they don’t account for the potential loss of funds now.
At best, New York will receive much less than the $989 million it was initially expecting, Paterson said.
“The reality is, the day of reckoning has come,” Paterson said. “I am disappointed, stunned and frankly chagrined with a Legislature that is either unwilling or unable to address the problems the state of New York has. New York, again, wants to blissfully move forward, fantasizing that Medicaid money is coming. We’re actually going in reverse.”
Paterson said he is open to further negotiations with legislative leaders, although the vetoes are “his final word” on the specific spending.
“I never take any joy in vetoing education money, health care, services for poor and indigent,” Paterson said. “It breaks my heart to do this. The only reason I’m doing it is because I think otherwise, we’re proverbially kicking the can down the road.”
Democrats criticized the vetoes.
A spokesman for Senate Democrats called the vetoes “a typical Albany power play with school children and taxpayers caught in the middle.” He said Democrats are discussing a potential veto override.
Assembly Speaker Sheldon Silver (D-Manhattan) said: “The budget passed by the Legislature would dramatically reduce state spending. The governor’s decision to veto these bills will mean larger classes, higher property taxes and more expensive tuition for SUNY and CUNY students.”
Lee Enterprises announced Wednesday that it will produce a new food publication for the St. Louis area, called Feast.
The free monthly publication will begin in August with a circulation of 70,000. It will be distributed at more than 500 locations in the St. Louis region.
The company described Feast as "a culinary magazine that celebrates St. Louis’ food culture." The magazine will serve as the "backbone" of the Feast Media brand, the company said.
Catherine Neville, co-founder and former editor of Sauce Magazine, has been named Feast’s publisher.
The Dow advanced for a sixth straight session Thursday. In Colorado, Array BioPharma and American Oil & Gas led actively traded gainers.
The Dow Jones Industrial Average finished the trading day at 11,144.57, up 21.46 points (0.19 percent).
The S&P 500 closed at 1,211.67, up 1.02 points (0.08 percent).
The NASDAQ Composite finished at 2,515.69, up 10.83 points (0.43 percent).
Among actively traded Colorado stocks, Array BioPharma Inc. (ARRY) led the day’s gainers, up 9.52 percent (28 cents) to close at $3.22.
Other Colorado gainers:
• American Oil & Gas Inc easy pay day loans. (AEZ) — Up 4.26 percent (30 cents) to $7.34.
• St. Mary Land & Exploration Co. (SM) — Up 3.57 percent ($1.36) to $39.45.
• General Moly Inc. (GMO) — Up 3.24 percent (12 cents) to $3.82.
• Liberty Capital Group (LCAPA), a tracking stock of Liberty Media Corp. — Up 2.4 percent ($1.01) to $43.16.
University of Missouri farm economists told Congress on Tuesday that they expect the agricultural economy to pick up — that is, if the general economy continues to do the same.
"The biggest point we’re making is that the health of the farm economy depends on the health of the larger economy," said Pat Westhoff, co-director of the Food and Agricultural Policy Research Institute at MU.
The institute’s annual report, which MU researchers have released for the past 25 years, predicted that the U.S. farm economy, which lost $30 billion last year, will spring back by about $10 billion. But, Westhoff said, "That depends on people being able to spend some money."
Farm income is predicted to rise over the next two years, mostly because growing global demand for meat will boost livestock prices. But, the report says, that rise depends on several variables, particularly energy costs, which affects the price of grain.
Pork producers, who have been losing money for more than a year, could break even this year — but that, too, depends on the global appetite for pork.
Dairy producers, who also had a disastrous 2009, could see some recovery as world dairy prices climb my credit score.
Consumers will likely see higher prices at the grocery as farm income improves, but food inflation will not reach the escalated levels of 2007 and 2008 when it peaked at 5.5 percent, according to the report. Last year, food inflation hit 1.8 percent.
While corn won’t reach the peak prices of 2008, demand for biofuels will continue to support prices, the report said. Westhoff explained that foreign demand for corn-based animal feed and ethanol mandates continue to use larger portions of the U.S. corn crop. Federal mandates require increasing ethanol use until 2015. Beyond that, corn prices will depend largely on oil prices, Westhoff said.
The report is delivered annually to the agriculture committees in both the House of Representatives and the Senate.
The FAPRI report comes on the heels of a U.S. Department of Agriculture analysis that predicted a similar picture for the farm economy.
"The degree of uncertainty is deeper than normal," Westhoff said.
Seven years and two jail convictions later, the Pentagon on Wednesday unveiled its latest attempt to get a $35 billion contract for refueling planes off the ground.
But within moments, the proposal was at risk of a crash and burn after a major contractor considered withholding its bid because it believed the terms unfairly favored its competitor.
And with thousands of jobs at stake for Alabama, the state’s two senators weighed in as well, saying the latest proposal appeared to do little to satisfy Northrop Grumman Corp.’s concerns that the terms were skewed against its larger, more expensive plane.
On Wednesday, the Pentagon publicly released its final bid request for the job flexcheck cash advance. The bid involves building 179 tankers, but the job could be expanded. A final contract is to be awarded in September.
Northrop said in a statement that it would review the complex proposal before commenting. A Northrop pullout would leave Boeing Co. as the lone bidder on one of the most protracted and expensive contracts in Pentagon history.
The Pentagon’s senior leaders on Wednesday defended the proposal.
"We believe that both offers are in a position to win," Air Force Secretary Michael Donley said.
U.S. foreclosure filings rose 15 percent in January from a year earlier and exceeded 300,000 for the 11th consecutive month as modification programs failed to keep delinquent borrowers in their homes, RealtyTrac Inc. said.
A total of 315,716 properties received a notice of default, auction or bank seizure last month, or one in 409 households, the Irvine, California-based seller of default data said today in a statement. Filings fell 10 percent from December.
Bank seizures, also known as real-estate-owned or REOs, may rise to a record 3 million this year, RealtyTrac said last month. About 66,000 delinquent loans out of a targeted 4 million by 2012 were permanently modified as of Dec. 31 under the Obama administration’s Home Affordable Modification Program, according to the Treasury Department. About 787,000 mortgages are in trial programs that change loan terms, the Treasury said Jan. 19.
“It’s almost inevitable that modifications will fail,” Michelle Meyer, New York-based U.S. economist for Barclays Capital Inc., said in an interview. “Over the next several months, we should see REOs increase at an accelerated pace.”
Foreclosure filings also fell in January of last year from December, only to rise in subsequent months, RealtyTrac said.
“If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.
Negative Equity
Unemployment and negative equity, where homeowners owe more than their properties are worth, are adding to the foreclosure total, said Stan Humphries, chief economist at Zillow.com. More than a fifth of U.S. homeowners had negative equity in the fourth quarter, the Seattle-based real estate data provider said yesterday in a report.
“It’s tough to come up with a program that works for unemployment-related foreclosures where the owner can’t pay, or for rate resets where the owner is way underwater,” Rick Sharga, RealtyTrac’s executive vice president for marketing, said in an interview yesterday.
The jobless rate unexpectedly fell to 9.7 percent in January, and payrolls dropped by 20,000, the Labor Department said Feb. 5 in separate reports. About 8.4 million jobs have been lost since the recession began in December 2007, with more than 4 million cut since Obama took office in January 2009.
Home Sales
Sales of existing U payday loans.S. homes rose 14 percent in the fourth quarter from the third while the median price fell 4.1 percent from a year earlier, the Chicago-based National Association of Realtors said today. The sales gain may not last when government support for housing, including the Federal Reserve’s $1.25 trillion purchase of mortgage bonds and a first-time buyer tax credit, ends as scheduled in the spring, Humphries said.
January’s total filings were down 12 percent from the July peak, according to RealtyTrac. Bank seizures climbed 31 percent from a year earlier, default notices rose 4 percent and scheduled auctions increased 15 percent.
Nevada had the highest foreclosure rate for the 37th straight month, with one in 95 households receiving a filing in January. Total filings in the state fell 18 percent from a year earlier to 11,854.
Arizona ranked second, with filings for one in 129 households. The rate for both California and Florida was one in 187 households, RealtyTrac said.
Utah, Idaho, Michigan, Illinois, Oregon and Georgia rounded out the 10 highest foreclosure rates.
California Filings
California had the most filings with 71,817, down 6.4 percent from a year earlier. Florida followed with 47,069, up 15 percent, and Arizona was third at 21,048, up 43 percent. The three states accounted for 44 percent of the U.S. total.
Illinois was fourth with 18,120 filings, up 25 percent from January 2009. Michigan ranked fifth with 17,574, up 54 percent. Texas, Nevada, Georgia, Ohio and New Jersey completed the 10 states with the most filings, RealtyTrac said.
Filings increased 23 percent from a year earlier to 6,146 in New Jersey. They rose 34 percent to 2,218 in Connecticut, and jumped 31 percent to 4,569 in New York.
Las Vegas had the highest foreclosure rate for cities with a population of more than 200,000. One in 82 households there got a filing, a 21 percent decrease from a year earlier.
Phoenix was second among the biggest cities at one in 102 households. Six California cities ranked third through eighth: Modesto, Stockton, Riverside-San Bernardino, Merced, Vallejo- Fairfield and Bakersfield, according to RealtyTrac.
Cape Coral-Fort Myers and Orlando-Kissimmee in Florida were ninth and 10th respectively, said RealtyTrac, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.
JetBlue inaugurated new service between Orlando and Montego Bay, Jamaica, on Feb. 8 with a daily round-trip flight out of Orlando International Airport.
Montego Bay is the 23rd nonstop destination served by JetBlue from Central Florida. The airline offers flights to six other destinations in the Caribbean and Latin America: Bogota, Colombia; Cancun, Mexico; Nassau, Bahamas; San Jose, Costa Rica; Santo Domingo, Dominican Republic; and Aguadilla, Ponce and San Juan, Puerto Rico.
JetBlue Airways (Nasdaq: JBLU) currently serves 60 cities with 600 daily flights.
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