Category Archives: job creation

ADP Employment Report – April Job Gains Slow

Posted on May 3, 2012 by admin

The ADP employment report shows that U.S. employers in the non-farm private business sector added only 119,000 jobs, on a seasonally adjusted basis, during the period from March to April. The April job gain represents the lowest job gain number in the last seven months. ADP Employer Services adjusted it previous figure employment growth, from February to March to 201,000, down from 209,000. According to the Bloomberg News pane l of economists, they expected a median consensus of 170,000 jobs. What the Numbers Show The following numbers show ADP’s breakdown of the employment numbers for April: Private, service-providing sector + 123,000 (158, 000 – March) Goods producing sector – 4,000 positions  lost Manufacturing employment – 5,000 (the first decline since September 2011) Companies with 500 or more employees (large payrolls) added 4,000 new jobs. Firms with 50 to 499 workers (medium payrolls) increased the workforce by 57,000. Of the 57,000 jobs, the service sector created 49,000 positions. The goods-producing segment provided 8,000 new positions. Small payrolls, enterprises with up to 49 employees, created 58,000 jobs. After several months of job gains during an unusually warm winter, the construction sector lost 5,000 positions. The financial sector continues its trends of jobs gains for the ninth straight month, with 13,000 new jobs created in April. David Sloan , an economist at company research and investment data firm 4CAST Inc., said that although recent April job gains has slowed down, the economy continues to expand at a “slow pace,” which he labels as “sustainable.” Is Consumer Spending Sustainable? It seems many companies are not all in when it comes to hiring. Employers still have a sense of uneasiness about whether the recent pattern of consumer spending will continue. Consumers account for around 70 percent of the U.S. economic growth. During the first quarter of 2012, consumer spending grew at a 2.9 percent pace– the best rate of economic expansion in more than 12 months. However, the economy contracted during the period measured from January to March 2012, to a growth rate of 2.2 percent. According to the Department of Commerce, weak business spending on equipment and inventory and government cutbacks caused the decline. In the last quarter of 2011, the U.S. economy recorded an annual growth rate of 3 percent. The Thomson Reuters/University of Michigan’s sentiment index shows that consumers may   have more optimism about the future than many economists may exhibit. In April, the index reached it highest level in a year. With U.S. workers receiving the smallest increase in after-tax income in the last two years, some economists have conveyed doubt as to the ability of consumers  to continue  the pace of  spending that has  kept the  U.S. economy  expanding, even though at a  sluggish pace. After a 0.9 percent gain in February, consumer spending decline to 0.3 percent in March. Personal after-tax income declined in the first two months of the year. In March, it showed a slight 0.2 percent gain.  It is unclear whether this rate will be enough to support the April job gains. Continue reading →

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Glut of Foreclosures Puts Pressure on Atlanta Real Estate Market

Posted on April 16, 2012 by admin

It seems cities like Phoenix, Miami and Las Vegas have received most of the publicity about the boom and bust of the U.S. real estate market. Nationwide, home prices have declined an average of 34 percent since the peak, based on the Corelogic Home Price Index. Home prices in the Atlanta real estate market have fallen below the year 2000 levels. According to Standard & Poor’s/Case-Shiller Home Price Index, Atlanta, Seattle, Tampa and Las Vegas make up the four metropolitan regions that have experience such decline in home prices. The Atlanta Real Estate Market The Atlanta Board of Realtors (ABR) recorded the completion of 2,860 residential sale transactions in its report for February 2012— a 15 percent year-over-year increase in and 6.9 percent more transactions over January. Alto Research reports an average of 182 days for homes on the market, as of April 8, 2012. The median sales price for February 2012, $110,000, represents a year-over-year decrease of 9.1 percent, but an increase of 3.8 percent over sale transactions recorded in January 2012. Although Atlanta expect a rebound in homes sales, but the glut of foreclosure homes on the market continues to exert downward pressure on home prices. Forty-eight percent of the 2,860 units sold in February or 1,372 homes consisted of bank owned foreclosures, which rates higher than the national average of 25 percent for distressed sales. The most recent data released by the real estate firm Realty Trac ranks Georgia with the fourth highest foreclosure rate. According to the Federal Reserve Board, Atlanta bears the distinction of having the most government foreclosures than any other city in the country. As a non-judicial state, Georgia mortgage lenders can foreclose on delinquent borrowers without going through the court system. With the recent move by the major banks to accelerate foreclosures, the inventory of foreclosed homes should grow. The combination of tighter credit markets, which makes it difficult for more people to qualify for mortgages, and people who lost their homes to foreclosures have created a high demand for rentals in the Atlanta housing market., but market rents  fall below  national prices. Zillow Rent index recorded a 1.1 percent increased over February of 2011. Peak in 2007, Current Values below the trend line Source: S&P/Case-Shiller Atlanta Metropolitan Area The 2010 U.S. Census 2010 states Atlanta has a population of 420,003. The Atlanta metropolitan area, which comprises 11 counties, including Clayton, Cobb, DeKalb, Douglas, Fayette, Fulton and Gwinnett, combined population exceeds 5.4 million people. The Atlanta metropolitan area has a median household income of $50,089. The state has a sales tax of 7.81% and an income tax rate of 6 percent. During the peak year of 2006, more than 100,000 people moved to the region. By 2009, the number of people relocating to the area dropped to 17,000, according to census data. Local Economy The recovery of the housing market has been uphill, especially with a larger than average market that depend on the real estate and construction sectors for 25 percent of it jobs versus a national average of 15 percent. These industries lost about 60,000 jobs. The region reported an unemployment rate of 9.0 percent in February 2012, compared to the national rate of 8.3 percent. In a recent Gallup Poll , Atlanta was named as have an above average job creation index based on date reviewed from January 2011 to January 2012, with a +17. North Dakota scored the highest at +34. Rhode Island recorded the lowest   index at + 4. Continue reading →

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Jobless Claims and Employment Report Signal a Possible Turning Point in the Economy

Posted on March 14, 2012 by admin

Data from the latest Jobless Claims Report and Employment Situation Summary (ESS) continue to point to strength in the economy. For the week ending March 3, the Department of Labor’s (DOL) Jobless Claims Report  says the number of initial claims rose 8,000 to 362,000, compared to the previous week adjusted figure of 354,000. From a statistical standpoint and economist look at this, as you know, change. For the week ending February 18, 2012, 7.387,648 individuals received unemployment benefits from state and federal programs—down 111,222 from the prior week. The DOL makes seasonal revisions to the numbers to account for increase hiring for the holidays or crop harvesting. Another positive snippet of news, according to the Department of Labor- Bureau of Labor Statistics’s (BLS)  Employment Situation Summary , February represents the third straight month in which businesses have added 200,000 or more jobs– with 227,000 net jobs gained for the month. Nonetheless, the overall employment rate of 8.3%, as reported in January, has remained unchanged. More people were also looking for work. The average wage also increased in February. The figure climbed 0.1% from $23.28 an hour to $23.31. Historically, job growth and wage increases have signaled that “qualified” that the number of qualified workers who cannot find a job is falling. Furthermore, people seeking employment do not have the requisite knowledge or skill set to qualify for current job openings. Components of the Employment Situation Summary The BLS has performed a current population survey (CPS) since 1940. It extracts from CPS data information on the labor force, employment, unemployment, earnings, individuals not working and other information, for the monthly Employment Situation Summary. The ESS has two components: household survey data and establishment survey data: Household Survey Data – The household survey data section of the Employment Situation Summary consists of information pulled from the CPS regarding households’ employment and wages. The key numbers under this section include the following data: Unemployed – 12.8 million Adult male and adult female unemployment rate – 7.7% Teenagers – 23.8% Whites 7.3% Blacks  – 14.1% Hispanics  - 10.7% Asians – 6.3% The number of people who have been searching for employment 27 weeks or more, referred to as the “long-term unemployed,”   totaled 5.4 million individuals or 42.6% of unemployment figure. According to the BLS report, 2.6 million Americans were” marginally attached to the labor force.” This denotes people who wanted to work and were available to work, in the last year. The survey does not include these individuals in the unemployment figures because they did not search for work in the four weeks prior to the BLS performing the survey. Establishment Survey Data – The BLS generates information for the establishment survey data from a sampling of 141,000 businesses and government agencies. The BLS polls 486,000 individual worksites and extracts information from the unemployment tax accounts of 9 million entities. The sampling covers about 33 percent of all nonfarm payroll workers. The typical report shows the industries and jobs created. Look at the top industries for job creation in February: Professional business services + 82,000, including about 45,000 temporary jobs Computer system design + 10,000 Management and technical consulting services + 7000 Healthcare and social assistance + 61,000 Leisure and hospitality + 44,000 (41,000 in food services) Manufacturing + 31,000 Other employment categories included in this part of the Employment Situation Summary are transportation, mining, and construction. Users of the report can also gain insights into trend. For example, professional business services created 1.4 million jobs since September 2009. The health care field expanded by 360,000 positions in the last 12 months. Conclusion: Some analysts and economists, including the director of research for the consulting firm J. H. Cohn, Patrick O’Keefe , have downplayed the encouraging metrics, and  with good reason. Last year, job gains exceeded 250,000 positions for the months of February, March and April. However, domestic and international events, such as rising gas prices, the natural disaster in Japan and   the financial woes of Greece and other EU nation states tempered any real momentum. Continue reading →

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January Home Sales Increase for Third Consecutive Month

Posted on February 23, 2012 by admin

According to a recent report issued by the National Association of Realtors (NAR), existing home sales rose in January – the third consecutive month of increased sales.  The rate of total existing home sales (which includes single-family, townhouses, co-ops, and condos) was up 4.3% compared to December’s numbers.  January home sales were an estimated 4.57 million, while December’s rate was 4.38 million.  The numbers for January 2012 were 0.7% above the 4.54 million sold in January 2011. NAR attributed the growth in sales to pent-up housing demand, low mortgage interest rates, low home prices, rising rents, and improved job creation.  The organization saw the improved figures as a favorable indicator for the health of the spring home market. Inventory: The total housing inventory – which measures existing homes available for sale – dipped 0.4% from December, representing a 6.1 month supply of homes at the current sales pace.  In December, the inventory was at a 6.4 month supply. This figure is 20.6% below the amount in January 2011. The total unsold inventory hit a peak of 4.04 million in July 2007, but January’s inventory was 2.31, the lowest amount since the start of the economic recovery. NAR believes that the market has a good balance between the number of sellers and buyers. Prices: The median sale price for existing homes was $154,700, which is a 2.0% decline from January 2011 and a 4.6% decline from December.  Foreclosures accounted for 22% of the January sales, while short sales accounted for 13%. These deeply discounted sales accounted for 35% of total sales, an increase from 32% in December. Regional Sales: The West led the increase in home sales with a jump of 8.8%.  In the Northeast and the Southern states, existing home sales increased 3.4% and 3.5% respectively. The increase in the Midwest was 1.0%, but still represents a 3.2% increase over January 2011. Why Consumers Care: All indices related to housing are seen as indicators of the overall strength of the economy, particularly given the mortgage crisis which started in 2007.  Based on information like existing home sales, investors make decisions about purchasing stocks and bonds related to mortgage companies, home builders, and other home-related industries.  When consumers purchase homes it also creates income for a wide range of services and products, including furniture, tree services, cleaning services, and many others, so an increased rate of home ownership can be good for the economy. Continue reading →

Posted in Economic News, Foreclosure, home sales, housing, interest rates, january home sales, job creation, Mortgage, mortgage info, mortgage interest rates, Mortgage Rates, Prime Rate, Recovery | Tagged , , , , , , , , , , | Leave a comment

December Jobs Increase Highest Monthly Increase Since 2001

Posted on January 8, 2012 by admin

The Report:  Payroll-processing company ADP today released a monthly employment report showing that businesses added 325,000 jobs in December – more than predicted.  The results are the highest monthly jobs increase going back in records to 2001.  ADP bases its report on the payrolls of 337,000 businesses that employ a collective 21 million workers. Their data does not include governmental employers. The bulk of the jobs were created by small and medium-sized businesses with fewer than 500 employees. The service sector of the economy produced 273,000 jobs while the production side added only 52,000. The Bureau of Labor Statistics (BLS) also showed that first time unemployment benefit claims declined last week by 15,000 to 372,000; the previous four weeks show the lowest first-time claim rate in three years.  Employer-announced job cuts in December declined 1.6% over November to 41,785; however, for all of 2011 such layoffs were up 14% compared to 2010. The Projections: With employment rate increases of 206,000 in November and 130,000 in October, analysts were not expecting a big surge in December employment. Based on previous months’ figures, analysts contacted by Bloomberg predicted an increase of 125,000 to 230,000 for December.  The consensus figure for the 38 economists surveyed was 160,000, so the actual amount was double the average prediction. Some experts warn that ADP’s December employment figures may be skewed by the “purge effect” because many employers keep employees on the payroll through the end of the year. So some employees who have been laid off or have quit are not reflected in these figures, making it difficult to come up with accurate employment numbers for that month. However, it is impossible to say to what degree purging would affect these numbers. What This Means for Consumers:   Analysts agreed that the better-than-expected figures are an indication of strengthening in the economy.  Paired with the decrease in new unemployment claims, the news suggests an improvement in a weak labor market, good news for unemployed Americans.  Bloomberg quoted Sean Incremona, a senior economist at 4cast Inc., “We certainly are seeing resilience in the job market. We’ve seen some improvement versus earlier in 2011 and it’s encouraging.” Experts are also hoping such strengthening in the job market will spark a rise in consumer spending, which accounts for 70% of the U.S. economy.  After the report was released, stocks saw an uptick, trimming their losses from earlier in the day – demonstrating that the market saw the report as a hopeful sign for economic improvement in 2012. Continue reading →

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Obama’s Latest Economic Proposal – The American Jobs Act

Posted on December 14, 2011 by admin

The American Jobs Act is a complex proposal that has been subject to a lot of confusing rhetoric about its provisions.  The Obama Administration maintains that it will help American companies by boosting the economy; however, many in Congress are concerned it will worsen the economic situation.  The proposal has four main provisions: Jobs: The American Jobs Act would grant businesses tax credits for hiring unemployed veterans and would supply funds to prevent layoffs of teachers, policemen, and firemen.  It also gives money for unemployed workers to rehabilitate foreclosed homes and businesses.  The Act would fund various projects to modernize schools as well as repairing public infrastructure such as airports, railways, and roads. Assistance for Small Businesses: Today’s economic crisis has been particularly difficult for small businesses, which are a vital component of the American economy.  The Act calls for a 50% reduction in payroll taxes for a business’s first $5 million in payroll.  This provision would benefit 98% of U.S. companies.  Small businesses that hire new workers could eliminate payroll taxes altogether.  It also includes provisions that would improve the accessibility of credit so that small companies can grow. Payroll Tax Relief: The Act proposes cutting 2012 payroll taxes by 50% for 160 million workers, an extension of the payroll tax cuts from last year.  An American family bringing in $50,000 a year would receive a $1,500 tax reduction.  However, this tax cut would not have an impact on Social Security funding.  The Act also directs the federal government to work with mortgage lenders in lowering barriers for mortgage refinancing and to encourage more people to refinance at today’s low rates. Returning to Work: The American Jobs Act would make changes to the unemployment insurance system and would prolong benefits for unemployed workers.  It would grant states more flexibility in using unemployment insurance for “bridge to work” projects which benefit people who have been unemployed for a long time.  These programs might include financing for volunteer programs and on-the-job training.  The Act would provide funding for programs to support unemployed workers in starting their own businesses as well as tax credits for businesses that employ long-term unemployed workers.  Other programs would assist low-income youth and adults in finding work. Opposition to the Act: Because Republicans in Congress oppose many components of the American Jobs Act, the Obama Administration probably will not be able to get it passed during this term.  Instead, the Administration is concentrating on getting various components through Congress.  The Republicans may consent to some aspects of the plan, including the extension of payroll tax cuts and unemployment benefits.  However, they already voted down one of the Act’s provisions to provide funding for teachers, policemen, and fireman.  Many Democrats are also wary of supporting the bill as a whole – although they may vote for certain aspects – since many provisions could contribute to the federal deficit. Continue reading →

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