Finance Blog number 1

U.S. job growth slumped in April for a second straight month. It pointed to a steadily growing but still sluggish economy that could tighten the presidential race.

A drop in the unemployment rate wasn’t a necessarily a healthy sign for the job market. The rate fell from 8.2 percent in March to 8.1 percent in April. But that was mainly because more people gave up looking for work.

People who aren’t looking for jobs aren’t counted as unemployed.

The 115,000 jobs added in April were fewer than the 154,000 jobs created in March, a number the government revised up from its first report a month ago of 120,000. It also marked a sharp decline from December through February, when the economy averaged 252,000 jobs per month.

The percentage of adults working or looking for work has fallen to its lowest level in more than 30 years. Many have become discouraged about their prospects.

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Here’s what The Associated Press’ reporters are finding:

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TEPID ECONOMY, TEPID HIRING

Over time, strong economic growth is vital for strong job growth.

But early this year, hiring accelerated much faster than economic growth did. Job gains averaged a strong 229,000 in the first three months. But the economy grew at a sluggish annual rate of 2.2 percent.

Economists began to wonder: Would growth catch up with hiring? Or would hiring slow to match economic growth (as measured by gross domestic product, or GDP)?

Some economists say April’s disappointing job growth suggests an answer, and it’s not a cheerful one:

“It now appears that jobs have decelerated into line with GDP, rather than GDP accelerating to catch up with jobs,” said Nigel Gault, an economist at IHS Global Insight.

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REVISING HISTORY

The job market seems to look better with hindsight.

The Labor Department has revised job growth upward for 10 straight months _ and for 18 of the past 21. Over the past 10 months, it’s added 413,000 jobs to the original estimates.

The job figures are revised twice. They’re updated in the two months after they first come out. And they’re revised again in an annual update meant to capture updated employment data from the states.

History shows that the updated totals typically follow the trend in job creation: When the economy is creating jobs consistently, the revisions tend to be positive. Months of job losses typically lead to negative revisions.

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THE POLITICAL DEBATE

A falling unemployment rate would seem to be good news for President Barack Obama’s re-election hopes. Dating to 1956, no incumbent president has lost when unemployment fell in the two years leading to an election.

On Election Day, unemployment will almost surely be less than it was two years earlier: 9.8 percent in November 2010.

But for the past two months, the rate has fallen for the wrong reason: More than 500,000 Americans have stopped looking for jobs and are no longer counted as unemployed business card. Job growth averaged a healthy 252,000 from December through February. It slowed to 135,000 in March and April.

The question is whether voters will focus more on the falling unemployment rate (good for Obama) or the modest job growth (not so good).

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A JAB FROM ROMNEY

Mitt Romney seized on the latter. He noted that the declining number of people seeking work explains the drop in the unemployment rate.

“This is way off from what should be happening in a normal recovery,” Romney said on Fox & Friends. “You have more people dropping out of the work force than you have getting jobs.”

“This is not progress,” Romney said.

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DISAPPEARING WORKERS

The percentage of Americans 16 and older working or looking for work is now 63.6 percent, the lowest since 1981. For men, the so-called “labor force participation rate” is 70 percent. That’s the lowest since the government started keeping records in 1948.

The rate peaked at 67.3 percent in early 2000 as women poured into the workplace. Since then, it’s turned south. Demographic and social trends help explain the drop: Baby boomers are aging and retiring.

And more women, especially in upper-income families, are staying at home. The drop in participation accelerated after the economy slid into recession in late 2007. The tough job market led many to give up looking for work.

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   SOUR INVESTORS

The stock market didn’t take Friday’s news well.

The Dow Jones industrial average sank 132 points, or 1 percent, in late-morning trading. The broader Standard & Poor’s 500 index fell 1.4 percent.

   Investors were a lot happier earlier this week. They sent the Dow to its highest close since December 2007.

   Technology stocks and banks led the market lower Friday. Utility companies were the only broad category of stock in the S&P 500 index trading higher. They tend to fare well when investors grow nervous about the economy.

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NO SURPRISE TO BERNANKE

One person not likely surprised by the sluggish hiring in April: Ben Bernanke.

The Federal Reserve chairman has cautioned for months that the spike in hiring at the start of the year didn’t match the economy’s more modest growth.

His Fed colleagues probably agree. Their latest forecasts show that even under a best-case scenario, unemployment will be at least 7.3 percent in late 2013. Historically, a normal rate would range between 5 percent and 6 percent.

Most analysts expect the Fed to keep its key interest rate at a record low near zero well into 2013, if not later. But few think hiring has weakened enough to trigger a third round of bond buying to help lower long-term rates and encourage more lending.

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He gets colonic irrigations, Botox injections and vitamin drips, and insists on black toilet paper in his home.

A revealing new biography offers intimate _ some might say too intimate _ details about Simon Cowell, along with a portrait of the entertainment mogul’s savvy business side.

“Sweet Revenge: The Intimate Life of Simon Cowell” is written by British journalist and biographer Tom Bower, whose previous subjects include former British Prime Minister Gordon Brown, jailed media mogul Conrad Black and ex-Harrods owner Mohammad al-Fayed.

His latest portrait of power centers on the tanned and brush-cut Cowell, 52, who has gained fame in both Britain and North America as producer and an acerbic judge on TV talent shows including “The X Factor” and “America’s Got Talent.”

Bower says he became fascinated by the story of a middle-aged music producer who struck gold by turning the old-fashioned talent contest into a slick 21st-century phenomenon _ and in the process earned a fortune estimated at 200 million pounds ($320 million) by the Sunday Times Rich List.

The book paints a picture of a man who struggled for years in the music business, spurred on to success out of a desire to prove his detractors wrong.

“He had 20 years _ more than 20 years _ of humiliation,” Bower said. “At school he was a total failure and as a music producer he was a total failure.

“But what he did have was charm and an ability to understand the music business because of all this failure.”

“Sweet Revenge,” published in the U.S. by Ballantine Books on Tuesday, is billed as the first book about Cowell written with the mogul’s participation _ though not his authorization. Bower spent many hours with Cowell aboard his private jet, at his Los Angeles home and on his yacht in the south of France and the Caribbean.

But he says Cowell told some friends and associates not to talk to him. Writing the book became “a cat and mouse game” between him and his subject.

“He clearly wanted his story told properly, but there are parts he didn’t want told and it was up to me to find out about them,” Bower said.

Cowell has stressed that the book was not written with his approval, tweeting: “This book is not written by me. It is unauthorized. The writer is Tom Bower.”

Cowell can’t have enjoyed the revelations in The Sun tabloid, which has been serializing the more salacious bits of Bower’s book.

Among the details: Cowell gets regular colonic irrigations because “it’s so cleansing _ and it makes my eyes shine brighter.” He is put on a drip of vitamins and nutrients for a half hour each week.

He’s not gay, despite long-standing rumors. The book reveals bedroom secrets including a brief affair with former “X Factor” judge Danii Minogue. But Bower says that Cowell isn’t interested in serious relationships.

“He is only interested in women who are uninhibited and uncomplicated,” Bower said. “He is not interested in relationships. He’s a schoolboy my credit score.”

He is, however, generous. Bower says Cowell gave his ex-fiance Mezhgan Hussainy, a makeup artist on “American Idol,” a $5 million Beverly Hills house as a parting gift. Most of his exes have refrained from spilling the beans in the media.

While Britain’s tabloids have focused on Cowell’s sex life, Bower is more interested in the story of money and power, of “business rivalry and the skullduggery.”

At the heart of the book is Cowell’s feud with fellow svengali and former Spice Girls manager Simon Fuller. The pair fell out over the 2001 British musical talent-show, “Pop Idol,” progenitor of “American Idol.” Fuller was listed as creator of the show despite what Cowell said was a verbal agreement to split the credit.

A legal battle between the two men was settled out of court, with Fuller getting the creator credit for “Idol” _ though Bower says he found “overwhelming” evidence that Cowell played a vital role.

Bower said Cowell was “naive and humiliated by Fuller’s dexterity.”

“He didn’t understand the importance of owning a format,” Bower said. “He learnt his lesson.”

He said Cowell became “incensed” by the “created by Simon Fuller” credit on “Pop Idol” and “American Idol,” and vowed to create his own rival show.

The result was singing competition “X Factor,” which had its debut in Britain in 2004 and in the U.S. last fall. Cowell also created “Britain’s Got Talent” and executive produces its U.S. spinoff, “America’s got Talent.”

Cowell’s response to the book, published in Britain on Friday, is so far unknown.

Publicist Max Clifford _ who says Cowell pays him hundreds of thousands of dollars a year to keep stories out of the press _ said he had advised Cowell not to speak to Bower, because it would undo years of carefully protected privacy.

“He knows it was a mistake,” Clifford said.

“For Simon, who has protected his privacy and never, ever spoken about his relationships with anybody, to suddenly be quoted about this, that and the other is to me very damaging.

“Having created an image that’s been hugely successful, to see him damage it like that is sad and disappointing,” Clifford said.

Bower, though, thinks the book’s portrait of Cowell is fairly positive.

While Bower has been openly hostile to some of his previous subjects _ he called Gordon Brown a ruthless bully and Conrad Black a crook _ he has a soft spot for Cowell.

“He’s not a crook,” Bower said. “So far he hasn’t sued me. And it was good fun.

“He doesn’t sit on his laurels. That’s what’s endearing about him. Although he is vain, he is a perfectionist and a professional _ and he understands the business better than most.”

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Jill Lawless can be reached at: http://twitter.com/JillLawless

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Spain

TaxMasters, the Houston-based firm that advertises it can help consumers facing problems with taxes, filed for bankruptcy protection Sunday.

The firm, which had a prominent ad campaign featuring CEO Patrick Cox on numerous cable networks, has already been facing complaints from the attorneys general of Texas and Minnesota, which accused it of deceptive practices.

The complaint from Texas Attorney General Greg Abbott, first filed nearly two years ago, brought a slew of consumer accusations against TaxMasters (). The civil trial in that case finally got underway Monday afternoon when TaxMasters’ request for a continuance was denied.

The Texas charges included unlawfully misleading customers about their service contract terms, failing to disclose its no-refunds policy, and falsely claiming that the firm’s employees would immediately begin work on a case. Sometimes the fact that TaxMasters did not actually start to work on a case until customers paid in full meant that taxpayers missed significant IRS deadlines.

Tax breaks for the unemployed

The complaint from Minnesota Attorney General Lori Swanson, filed in December 2010, alleges TaxMasters got customers to pay advance fees of $2,000 to $8,000 by misstating the help it would provide people with unpaid tax bills. In some cases, the company claimed it could reduce people’s tax bills by up to 90%, but then delivered little or no help, according to the complaint, pocketing the non-refundable deposits.

This complaint was settled in August of last year, with TaxMasters denying any wrongdoing but agreeing to reform its business practices in the state and pay $500,000.

In addition, the Better Business Bureau says it has received more than 1,000 complaints about TaxMasters over the course of the last three years.

The bankruptcy filing said TaxMasters owes creditors between $1 million and $10 million, and that its assets total only $50,000 or less. It did not list its creditors but it said it owes money to between 1,000 and 5,000 people and businesses payday loan.

Robert McKenzie, a tax attorney and partner with Chicago firm Arnstein & Lehr, said this is the third such tax settlement service to go bankrupt recently, following the demise of Roni Deutch and another firm, JK Harris. All three had been actively advertising their services.

"There are certainly reputable people doing this work," said McKenzie. "The problem with the ones that are failing is they’ve budgeted large amounts for advertising, and the intake interviews are done not by tax professionals but by sales people working on commission, and thus making unrealistic promises."

The company’s most recent financial reports show it spent nearly $16 million on advertising in 2010, eating up about 37% of its revenue. Among the networks TaxMasters advertised on was CNN, one of the parents of CNNMoney.

TaxMasters recently restated results to show a $4.7 million loss in 2010, and essentially break-even results in the first quarter of 2011, the most recent quarter for which it has reported results.

McKenzie said that the Internal Revenue Service is willing to settle cases for less than the taxes owed, but that in almost all the cases they end up taking the taxpayer’s home and other assets, in addition to payments out of future earnings. He said almost three-quarters of taxpayers who apply to pay less than they owe have those applications rejected by the IRS.

Beware of tax scams

Calls to Taxmasters and its attorney for comments about the bankruptcy filing and complaints were not immediately returned.

The company’s Web site made no mention of the bankruptcy filing Monday, even though it had signaled a bankruptcy filing was planned in a filing with the Securities and Exchange Commission on Friday.

The bankruptcy filing was made in Houston. 

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Panera Bread Co. founder Ron Shaich will share the title of CEO of the chain of bakery cafes with Bill Moreton, the company announced today.

Moreton was promoted to president and CEO of the Sunset Hills-based company in May 2010, and Shaich took on the role of executive chairman of the board of directors.

The chain has more than 1,500 locations and operates locally as St. Louis Bread Co.  

Shaich’s new titles are co-CEO and chairman, and Moreton is co-CEO and president payday loans. 

In announcing the changes, Panera said in a statement that the switch to co-CEOs “formalizes a relationship that has evolved over the last year and is a reflection of the way in which Shaich and Moreton have been operating as partners.”

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Oil prices hovered below $107 a barrel Tuesday in Asia after U.S. and Israel leaders met to discuss growing tensions over Iran’s nuclear program.

Benchmark oil for April delivery was down 2 cents to $106.70 at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 2 cents to settle at $106.72 per barrel in New York on Monday.

Brent crude was steady at $123.80 per barrel in London.

After a meeting Monday in Washington, President Barack Obama and Israeli Prime Minister Benjamin Netanyahu showed no sign of give on competing ways to resolve the crisis. Obama urged pressure and diplomacy to prevent Iran from getting a nuclear bomb while Netanyahu emphasized his nation’s right to a pre-emptive attack.

The U.S., Europe, Israel and other nations fear that Iran may be building a nuclear weapon. Iran, the world’s third-largest oil exporter, denies the charge.

“The Iranian fear premium didn’t change in our view,” energy consultant Ritterbusch and Associates said in a report.

Crude has risen from $96 last month amid investor concern that a military conflict aimed at destroying Iran’s nuclear capabilities would disrupt global oil supplies. Analysts say Saudi Arabia and other oil producers do not have enough spare capacity to quickly make up for Iran’s 4 million barrels a day of crude.

Analysts estimate crude would jump to $150 in the wake of an attack by Israel on Iran’s nuclear operations.

“The risk of a supply disruption due to geopolitical factors is uncomfortably high and increasing,” said Richard Soultanian of NUS Consulting.

In other energy trading, heating oil fell 0.6 cent to $3.21 per gallon and gasoline futures were steady at $3.26 per gallon. Natural gas fell 0.5 cent at $2.35 per 1,000 cubic feet.

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The global economy faces

ATHENS

Taiwan President Ma Ying-jeou named Sean Chen as premier, choosing an official who oversaw the island

Leaders of the world