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U.S. Job Cuts Rose 20% From Year Ago, Challenger Says

March 3, 2011 1 comment

bloomberg.com

Employers in the U.S. announced more job cuts in February than in the same month last year, led by a surge at government agencies.

Planned firings increased 20 percent to 50,702 last month from February 2010, the first year-over-year gain since May 2009, according to a report today from Chicago-based Challenger, Gray & Christmas Inc. Announcements at federal, state and local government offices almost tripled from last year.

“More job cuts at the federal level are expected in the months ahead as pressure mounts to cut costs and rein in the soaring national debt,” John A. Challenger, the outplacement company’s chief executive officer, said in a statement.

Dismissals of government workers may contribute to a slowdown in consumer spending, which accounts for 70 percent of the economy. Combined with the highest gasoline prices in two years, the threat of a pause in purchases may already be causing retailers, which had the second-biggest number of announcements last month, to pare payrolls, said Challenger.

“If gasoline tops $4 per gallon in the coming weeks, consumers may be forced to make significant changes to their spending habits,” said Challenger. “At this stage of the recovery, that could be an extremely damaging setback.”

Compared with last month, which saw the fewest firings for any January since record-keeping began in 1993, job-cut announcements climbed 32 percent. Because the figures Read more…

Fed chief expects high unemployment, economic growth in 2011

January 24, 2011 Comments off

Vicki Needham

Unemployment will remain high, the nation’s economy could expand by 4 percent and interest rates may need go up, Federal Reserve Bank of Philadelphia President Charles Plosser said Monday.

“If economic growth in the United States continues to gain traction and the prospects begin to look ever better, it might be time for us to begin thinking about how do we begin to gradually take our foot off the accelerator,” Plosser told reporters after a speech at the Central Bank of Chile in Santiago, according to news reports.

Plosser said he may favor a rate increase if economic growth necessitates a change.

“It might. I’m not going to rule that out,” he said.

The central bank has said that it plans to keep short-term interest rates low for an “extended period.”

During Monday’s speech, Plosser also predicted that the U.S. could grow between 3 percent and 4 percent this year.

The Fed’s plan to purchase $600 billion in government debt will probably continue through June while the nation’s 15 million unemployed look for work, although Plosser didn’t rule out pulling the stimulus funds back earlier.

“It could end earlier if economic conditions call for it, but right now I’m not sure that that’s the most likely outcome,” he told reporters. “It obviously creates challenges for some countries because of appreciating currencies. But I think that will pass. Those are short-run issues.”

Plosser has expressed concern about whether the Fed’s quantitative easing, also known as QE2, will spur economic growth while lowering the jobless rate that has remained above 9 percent for 20 months.

“Monetary policy is not going to be able to speed up the adjustments in labor markets or prevent asset bubbles, and attempts to do so may create more instability, not less,” he said.

“Expecting too much of monetary policy will undermine its ability to achieve the one thing that it is well-designed to do — ensuring long-term price stability.”

QE2 has brought harsh criticism from some lawmakers on Capitol Hill who argue that the plan could devalue the dollar and cause inflation.

More than a million immigrants land U.S. jobs

January 22, 2011 Comments off

Stepped-up enforcement is not deterring trend of foreign-born employment

DALLAS — Over the past two years, as U.S. unemployment remained near double-digit levels and the economy shed jobs in the wake of the financial crisis, over a million foreign-born arrivals to America found work, many illegally.

Those are among the findings of a review of U.S. Bureau of Labor Statistics and Census Bureau data conducted exclusively for Reuters by researchers at the Center for Labor Market Studies at Northeastern University in Boston.

Often young and unskilled or semi-skilled, immigrants have taken jobs Americans could do in areas like construction, willing to work for less wages. Others land jobs that unemployed Americans turn up their noses at or lack the skills to do.

With a national unemployment rate of 9.4 percent, domestic job creation is at the top of President Barack Obama’s agenda and such findings could add to calls to tighten up on illegal immigration. But much of it is Hispanic and the growing Latino vote is a key base for Obama’s Democratic Party.

Many of the new arrivals, according to employers, brought with them skills required of the building trade and found work in sectors such as construction, where jobless rates are high.

“Employers have chosen to use new immigrants over native-born workers and have continued to displace large numbers of blue-collar workers and young adults without college degrees,” said Andrew Sum, the director of the Center for Labor Market Studies. Read more…