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Total nonfarm payroll employment fell sharply (-598,000) in January. Since the recession began in December 2007, 3.6 million jobs have been lost, with about half of the decrease occurring in the last 3 months. In January, employment declined in nearly all major industries, while health care and private education added jobs.
Nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.
Manufacturing employment fell by 207,000 in January, the largest 1-month decline since October 1982.
Construction lost 111,000 jobs in January. Employment in the industry has fallen by about 1.0 million since peaking in January 2007.
Retail trade employment fell by 45,000 in January and by 592,000 since a peak in November 2007.
Until confidence returns on the solvency of banks, the market is unlikely to break out of the range between 750 and 900 on the Standard & Poor's 500 and between 7500 and 9000 on the Dow Jones Industrial Average, traders say.
Many large banking stocks are trading at distressed levels, and Bank of America closed Wednesday at its lowest level since 1990. A pattern has emerged where banking stocks lead the broad market on a rally at the first signs of new government intervention, only to return to their downward ways during the ensuing weeks as the harsh reality sinks in: There is no quick fix to fears of insolvency in the banking system.
Recent stock-market action reminds some market participants of the short-lived rallies when a plan to rescue mortgage lenders Fannie Mae and Freddie Mac was unveiled, or when the Troubled Asset Relief Program, or TARP, financial rescue package was floated.
So far, some traders say, there is little reason to believe the unfolding of this new plan will be any different to the other instances of "buy the rumor, sell the news."
In this case, there is no guarantee that any government plan will stabilize the financial sector, and there remains the possibility that the government could have to take big ownership stakes that would dilute current shareholders. "Every time we have some kind of financial stimulation from the government, we definitely pop initially, but the overall trend tends to be lower" for the financials and the market, said Ryan Detrick, senior technical strategist at Schaeffer's Investment Research.
Every time the oil market attempts to ignite a rally, an upsurge from the sea of crude stored on waterborne tankers snuffs it out.
The accumulation of oil held in "floating storage" gained speed in December, as available space in traditional onshore storage hubs dwindled due to excess supplies. This floating storage is now among the biggest impediments to oil prices recovering any of the ground lost over the past six months. Companies are quick to sell cargoes at the hint of a turnaround, unleashing a flood of oil onto the market.
More oil is being produced than recession-stricken economies need, and prices have fallen as the extra crude fills storage terminals world-wide. Crude-futures prices are down 72% from the record hit in July. Wednesday, light, sweet crude oil for March delivery settled 46 cents lower, or 1.1%, at $40.32 a barrel on the New York Mercantile Exchange.
The oil sitting at sea adds an extra layer of uncertainty about the supply overhang, which traders said must be whittled down for oil prices to rebound.
Tankers carrying up to two million barrels each aren't counted in official statistics. Ship trackers estimate that as many as 80 million barrels may be on the water, or more than twice the amount kept in the largest commercial storage center in the U.S., in Cushing, Okla.
"There's no database of ships sitting on storage right now. It makes it very, very difficult to speculate" on what is on the water, said one tanker broker.
Harry Markopolos, a former money manager who sought to convince regulators for nine years that Bernard Madoff was a fraud, said the U.S. Securities and Exchange Commission suffers from “investigative ineptitude.”
Markopolos told Congress today that he contacted the SEC in 2000 after examining Madoff’s investment strategy and determining in four hours that returns exceeding 10 percent weren’t possible. Markopolos, in almost a decade of communication, said only one SEC staff member understood Madoff’s scheme and “the threat it posed to the public.”
“My experiences with other SEC officials proved to be a systemic disappointment and lead me to conclude that the SEC securities lawyers, if only through their investigative ineptitude and financial illiteracy, colluded to maintain large frauds such as the one to which Madoff later confessed,” Markopolos said. Madoff “had a lot of help,” Markopolos said.
Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.
The drop in the ADP Employer Services gauge was less than economists forecast and followed a revised cut of 659,000 for the prior month.
Employers are slashing workers as clogged credit markets and slumps from housing to manufacturing threaten to extend the longest recession in a quarter of a century. Persistent job losses will probably further curb consumer spending, which represents about 70 percent of the economy.
“We’re in for several more months of bleeding on the jobs front,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call with reporters.
Planned layoffs at U.S. firms in January reached their highest monthly level in seven years, according to a report released on Wednesday, as the more than year-old U.S. recession took an increasingly heavy toll on employment.
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Planned layoffs at U.S. firms in January reached their highest monthly level in seven years, according to a report released on Wednesday, as the more than year-old U.S. recession took an increasingly heavy toll on employment.
Ford Motor Co. said U.S. sales fell 40 percent in January, and Toyota Motor Corp. posted a 32 percent drop as the recession ravaged demand in the world’s biggest auto market.The declines were the 14th and ninth in a row for the two automakers, and pointed toward further contraction for U.S. industrywide sales that haven’t increased since October 2007. Honda Motor Co. said U.S. sales were down 28 percent.
Consider this information along with the ISM info from below.
The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, Zillow.com said.
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About $6.1 trillion of value has been lost since the housing market peaked in the second quarter of 2006 and last year’s decline was almost triple the $1.3 trillion lost in 2007, Zillow said.
Values have dropped for eight straight quarters. They fell in Manhattan for the first time since Zillow began including the New York City borough in its records two years ago.
The report was issued today by Norbert J. Ore, C.P.M., chair of the Institute for Supply Management™ Manufacturing Business Survey Committee. "January marked 12 months of contraction in the manufacturing sector. However, the rate of decline as measured by the PMI was slower than experienced in December. The January New Orders Index is at 33.2 percent, up from the seasonally adjusted 23.1 percent recorded in December. While this is a significant month-over-month improvement, it is still a sign of continuing weakness in the sector. Comments from our respondents indicate that it will take a recovery in automobiles and housing for the manufacturing sector to once again prosper. On a positive note, the Prices Index continues to indicate significant deflation in the prices that manufacturers have to pay for their inputs, and this should ultimately be good for the consumer."
U.S. real consumer spending fell in December for the sixth time in seven months as consumers saved what they gained from falling energy prices, the Commerce Department reported Monday.
Nominal spending fell 1% in December, marking the sixth straight decline. This was in line with expectations of economists surveyed by MarketWatch. See Economic Calendar.
After adjusting for a 0.5% decline in prices, real consumer spending fell 0.5% in
December, a reversal following a 0.3% increase in November, the government said. It was the sixth decline in real spending in the past seven months. Read the full government report.
Consumer spending in the U.S. fell in December for a record sixth consecutive month, capping the worst year since 1961, a slump that is likely to persist as companies slash payrolls.
Inventories unexpectedly rose by $6.2 billion, adding 1.3 percentage points to GDP, after falling in the prior four quarters. Yet that "really is not a positive in an economy where demand is falling rapidly," Dye said.Slashing stockpiles could be a big negative in early 2009.
Final sales, which exclude inventories, fell at a 5.1% pace in the fourth quarter amid broad and deep weakness.
Consumer spending on durable goods such as cars and TVs dived at a 22.4% annual rate in the fourth quarter, the biggest drop in more than two decades. Residential investment plummeted 23.6%, and investment in equipment and software dropped at a 28% pace.