Finance Blog number 1

The unemployment rate in the U.S. held at 9.7 percent in February and employers cut fewer jobs than anticipated, indicating improvement in the labor market even as East Coast blizzards forced temporary closings of some businesses.

Payrolls dropped by 36,000 last month after a revised 26,000 decrease in January, a Labor Department report showed yesterday in Washington. The jobless rate, which has not increased since October, held at 9.7 percent, even as more people entered the workforce.

Stocks and the dollar rallied while Treasuries fell as investors reckoned the economy would have added jobs were it not for seasonal snowfall records in cities including Baltimore and Philadelphia. The U.S. needs employment growth to sustain a recovery from a recession that has cost 8.4 million jobs since December 2007.

“The weather effects were enough to transform what would’ve been a positive into a negative,” said David Resler, chief economist at Nomura Securities International Inc. in New York, referring to payrolls. “Job growth is happening as we speak. Companies are seeing a stabilization of demand.”

The Standard & Poor’s 500 Index rose 1.4 percent to close at 1,138.7 in New York. The dollar strengthened 1.4 percent to 90.3 yen from 89.02 the previous day. The yield on the 10-year Treasury note rose to 3.68 percent at 4:24 p.m. in New York from 3.60 percent late the prior day.

Payrolls were forecast to decrease by 68,000, according to the median estimate of 82 economists surveyed by Bloomberg News. The jobless rate was projected to increase to 9.8 percent.

Technology Services

Among companies adding workers is Accenture Plc, the world’s second-largest technology-services provider, which plans to boost payrolls by about 50,000, with as many as 9,000 jobs being added in the U.S. by the end of August.

“We are seeing a very broad uplift globally” in demand, John Campagnino, director of worldwide recruiting, said in a March 3 interview. He said the trend “brings us right back to the pre-recession” levels.

The number of temporary workers increased by 48,000 in February, the fifth straight monthly gain. Payrolls at temporary-help agencies often turn up before total employment because companies prefer to see a steady increase in demand before taking on permanent staff.

Christina Romer, President Barack Obama’s chief economist, told Bloomberg Television yesterday that it’s “very realistic” to expect employment growth in the U.S. in the next few months. Even so, “anyone that goes out and talks to people across this country knows that the labor market is still very distressed.”

Factory Payrolls

Factory payrolls increased 1,000 in February after rising 20,000 in the prior month. The median forecast by economists called for a drop of 15,000. Payrolls at builders fell 64,000 after decreasing 77,000. Financial firms reduced payrolls by 10,000 after a 13,000 decline.

The labor market may be slow to recover from the biggest slump since World War II, giving the Federal Reserve scope to keep interest rates low and putting pressure on Obama and lawmakers to foster job growth.

“A lot of people are not seeing the kind of job gains or income gains that they are looking for,” John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said yesterday. “There is going to be a lot of dissatisfaction with politicians and that is giving rise to this political angst.”

Many companies have been reluctant to hire even after the world’s largest economy grew at a 5.9 percent annual rate in the last three months of 2009, the most in six years.

Underemployment Rate

Economists surveyed by Bloomberg last month projected the jobless rate will average 9.8 percent in 2010 and end the year at 9.5 percent.

The underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking — rose to 16.8 percent from 16.5 percent. The number of part-time workers for economic reasons climbed to 8.8 million in February from 8.3 million the previous month.

Two storms blanketed parts of the country in early February, the second coming during the week that included the 12th of the month, the government’s survey week.

Yesterday’s report showed 1 million Americans said bad weather prevented them from getting to work during the survey week. About 290,000 people on average say bad weather has prevented them from getting to work, according to February figures going back three decades.

Economists at Macroeconomic Advisers LLC in St. Louis projected the weather would reduce the payroll count by anywhere from 150,000 to 220,000 workers. The drop will probably be reversed this month, they said.

January 1996

The most recent storm of similar intensity that occurred during a survey week was in January 1996. The current data for payrolls that month, which have gone through several revisions since the initial estimate, show a 19,000 drop in employment followed by a gain of 434,000 in February.

Government payrolls decreased by 18,000 in February. State and local governments reduced employment by 25,000, while the federal government added 7,000. The increase at the federal level reflected in part the hiring of 15,000 temporary workers to conduct the 2010 census.

The Census Bureau said it will hire 1.15 million temporary workers in the first half of the year to conduct the population count that takes place every 10 years. The program may have the biggest impact on payroll figures in April through June, when the bulk of the hiring will take place, and will then subtract from the job count the following months after the work is done.

Source

Bets against the fiscally unfit are multiplying, and there’s no telling where they will stop.

So far, Dubai, Greece, Portugal and Spain have come under attack as investors demand higher interest rates on bonds sold by cash-strapped nations. For now, few observers expect to see defaults. But rising borrowing costs alone could exact a toll on already tepid economic recoveries.

What’s more, even deeper-pocketed issuers such as the U.S. and the U.K. could be paying much higher yields by next year, as they struggle with political squabbles about rising deficits fueled by a massive price tag for bailouts and stimulus.

"It all depends on growth," said Jan Randolph, director of sovereign risk analysis at forecasting firm IHS Global Insight. "Economic growth is the great redeemer in these sorts of situations, but it’s not at all clear that we can count on seeing enough growth in a lot of the heavily indebted countries."

Borrowing costs have soared over the past two months in Greece, and this week the deficit hawks have swooped down on two other southern European nations, Portugal and Spain.

Interest-rate spreads between these countries’ bonds and those issued by Germany have widened this year, hitting record levels in Greece.

The tremors come as officials in rich countries struggle with pressures once associated with so-called emerging markets: investors demanding that governments slash spending at a time of falling tax collections, soaring debts and, in many cases, growing public unrest.

The worries in Greece, Spain and Portugal stem in part from the benefits the southern European nations derived earlier this decade from using Europe’s common currency, the euro.

Their ability to issue cheap debt, thanks to the euro’s association with Germany’s sound-money policies, allowed them to borrow more than they could afford and sparked a boom in consumer spending, Randolph said. This also helped the high-saving, export-oriented economies of Northern Europe, by creating a bigger market for their goods.

"In a sense, the euro worked too well," he said. "The benefits masked the fact that these countries were losing competitiveness in terms of labor costs, and now that gap can’t be avoided."

In response, Greece recently promised to sharply cut its budget deficit, from a current level of 12.9% to 3% by 2012. Spain, already facing 19% unemployment after the collapse of a massive housing bubble, says it will cut spending by $70 billion over several years.

But given the scale of the problems and the massive borrowing needs of nations around the globe, it’s little surprise that default fears have failed to go away.

"There’s nothing so far to show they’ve fixed anything," said Tim Backshall, chief strategist for Credit Derivatives Research. "What we’ve seen is a dramatic selloff as investors start to adjust to the lower expectations for the euro area."

While Backshall said he believes most of the selling in government bond markets has come from so-called real money investors who hold securities for the long term, the past week has brought an uptick of traders playing what’s known as sovereign risk.

"Many hedge funds have spotted an opportunity in government debt markets where public finances have been under great stress," Randolph wrote in a recent note to clients. This trade involves "shorting the weaker credits against the stronger, playing on market fears and heightened uncertainty, while making money in the ensuing volatility."

That said, he thinks uncertainty will have to get much greater before there is a real risk of default in Greece, let alone Portugal, Spain or fiscally challenged Ireland. (Those noting the debt worries refer to Portugal, Ireland, Greece and Spain as Europe’s PIGS, and to that group plus Italy as the PIIGS.) Randolph notes that during the 1980s, Ireland’s bonds traded at similar spreads to Greece’s now, without any default.

What’s more, any possible default would deal a blow to the credibility of the euro itself. Economists don’t expect the European Central Bank to stand idly by while a monetary union that took years to assemble disintegrates.

"I believe the EU cannot let either Greece or Spain default, any more than Canada would allow one of its provinces to default," said Maurice Levi, a professor at the University of British Columbia in Vancouver.

But then, few in February 2008 would have predicted the scale of devastation in the financial sector before governments finally stepped in. And even if sovereign defaults still look like a long shot, higher rates and stability worries alone can do their damage when economies are in a weakened state.

That point was driven home Thursday by a stock market selloff led by banks. Spanish banks BBVA (BBVA) and Santander (STD) each plunged more than 9%. Falling spending and higher unemployment can wreak havoc on bank balance sheets, further impeding growth.

"The fundamentals in a lot of these places look pretty ugly," said Backshall. "There’s a sense this probably isn’t the end of this trade." 

Source

Greek Prime Minister George Papandreou said today the government has no plans for new measures to curb the European Union’s largest deficit.

Plans to tame the government finances are “credible,” he told reporters in New Delhi. The EU backed on Feb. 3 the government’s proposals to trim the deficit after Papandreou pledged to raise fuel taxes and the retirement age and extended a wage freeze to all public workers.

Papandreou said today the proposals need to be implemented to achieve their goals, and the nation has substantial funds available from the EU. Yesterday the International Monetary fund said the Greek plan is “appropriate” and European Central Bank President Jean-Claude Trichet said he’s confident Greece can get the deficit under control.

The risk premium investors demand to buy Greek debt over comparable German 10-year bonds widened 10 basis points to 364 basis points the highest in a week. The benchmark ASE stock index fell for a third day, declining 2 percent, bringing its slide for this week to more than 9 percent.

The deficit reached 12.7 percent of gross domestic product last year, and officials are battling to convince investors it can shrink the shortfall to within the EU’S 3 percent limit in 2012 and avoid a bailout. Yesterday Greece’s biggest union approved the second mass strike this month and tax collectors began a 48-hour walkout, suggesting that workers are ignoring Papandreou’s call for sacrifice.

“He can’t come out and say more needs to be done, he has to talk the plans up,” said Peter Dixon, an economist at Commerzbank AG in London. “The question becomes whether Greece can follow through with the plans they put in place and whether they are enough. The jury is still out on that.”

Source

Robert M. Mills has been named the new president and chief operating officer of University Housing Services Inc. in St. Petersburg, succeeding UHS founder William H. Mills Jr., who will remain as chairman and chief executive officer.

Robert Mills, who joined his father’s firm in 2002, was the executive vice president of the campus housing development company, responsible for the operational efficiency of the development process and directly involved in more than $300 million of on-campus development projects in the last eight years.

The leadership shift comes when the student housing industry has been faced with the ongoing challenge of finding viable ways to implement increasing demands for student housing with shrinking college budgets and financial options, UHS said in a release. Robert Mills is expected to focus on growing the company’s core student housing business by expanding both the company’s service offerings and geographic reach.

UHS has worked on more than 16 campus housing projects throughout the Southeast, according to the company’s Web site, including Florida Gulf Coast University, the Florida Institute of Technology and the University of North Alabama among others payday loans. UHS maintains a southeast regional office in Atlanta.

Robert Mills, who received a bachelor’s degree in building construction in 1987 from the University of Florida, previously worked for Beers Construction Co., rising to group vice president where he was responsible for meeting all the construction needs of both public and private higher-education institutional clients.

Before starting UHS, William Mills was owner, chairman and president of Federal Construction Co. fro 1982 to 1991, which would become one of the largest construction management firms in the Southeast before being sold to Trafalgar House.

Federal Construction was originally known as Mills & Jones Construction Co., founded by William Mills Sr. in 1946. That builder was responsible for buildings such as the Maas Brothers Department Store in St. Petersburg, the Florida Power Corp. headquarters in St. Petersburg and the original Busch Gardens outside of Temple Terrace.

William Mills Sr., who helped found UHS following the Federal Construction sale, died last June. He was 98.

Source

The Toronto stock market headed for a lower open as oil prices fell on concerns about reduced demand and a stronger U.S. dollar.

The Canadian dollar was down 0.29 of a cent to 97.42 cents US.

U.S. futures also pointed to a negative open despite an earnings report from chip giant Intel Corp. after the market close that blew past expectations on earnings and revenue. But investors were less happy with results from JPMogan Chase, which beat earnings expectations but missed on revenue.

The Dow Jones industrial futures fell 44 points to 10,619, the Nasdaq futures declined 9.25 points to 1,879 and the S&P 500 futures were off 6.8 points to 1,138.4.

JPMorgan Chase earned US$3.28 billion or 74 cents a share during the final three months of 2009, primarily because its investment banking and trading businesses were still profiting from a 10-month market rally. The showing easily topping analysts expectations of 61 cents but total revenue fell below expectations and the company’s stock fell about two per cent in pre-opening trading.

“Even though actual earnings rose fourfold from a year earlier, investors are not happy with the fact that the retail bank operation still reported a loss for the quarter and boosted its loan loss reserves,” observed Andrew Pyle, investment adviser at ScotiaMcLeod in Peterborough, Ont.

“Well, after the almost unbelievable run higher in bank stocks last year you have to expect some disappointments along the way.”

Intel Corp. turned in a profit of US$2.3 billion or 40 cents a share, much higher than the 30 cents a share that analysts forecast. It also beat revenue forecasts and the number one maker of computer microprocessors delivered a bright profit outlook for 2010 short term personal loan.

Oil prices moved down for a fifth session with the February crude contract on the New York Mercantile Exchange 51 cents lower to US$78.88 a barrel.

The latest dip came even as the International Energy Agency predicted in its monthly report that oil demand will average 86.3 million barrels a day this year, or 1.4 million barrels a day more than in 2009.

The February bullion contract on the Nymex moved down $7 to US$1,136 and March copper was unchanged at US$3.39.

Before the markets open, the U.S. government provides two fresh readings on the economy.

The Labour Department is likely to report that consumer prices in December rose 0.2 per cent after rising 0.4 per cent in November, according to forecasts of analysts polled by Thomson Reuters. The report is also likely to show that consumer prices for 2009 posted their first annual drop since 1954.

Later in the morning, the Federal Reserve issues its report on production from factories, mines and utilities for December. Economists predict that industrial production rose 0.6 per cent, after rising 0.8 per cent the previous month.

Overseas, Japan’s Nikkei 225 stock average advanced 0.7 per cent while Hong Kong’s Hang Seng slipped 0.3 per cent.

London’s FTSE 100 index eased 0.24 per cent, Frankfurt’s DAX dropped 0.94 per cent while the Paris CAC 40 declined 0.6 per cent.

Source

Singapore’s consumer prices fell the least in eight months in November as food and transport costs climbed amid an economic recovery.

The consumer price index slid 0.2 percent from a year earlier, after falling 0.8 percent in October, the Department of Statistics said in a statement in Singapore today. The median forecast of six economists surveyed by Bloomberg News was for a 0.4 percent drop. Prices rose 0.4 percent from October, without adjusting for seasonal factors.

Rising commodity and food prices, coupled with an improving global economy, have sparked concerns that inflation will accelerate and derail Asia’s recovery. That’s prompted policy makers in Australia, Vietnam and India to start raising interest rates or signal they may remove monetary stimulus soon.

“As the economy is expected to continue its recovery, the outlook is for a moderate positive trend in inflation into next year,” said David Cohen, an economist with Action Economics in Singapore.

Singapore’s gross domestic product climbed an annualized 14.2 percent last quarter from the previous three months, the second consecutive expansion as the island exited the deepest recession since independence in 1965.

The central bank, which uses its currency rather than interest rates to manage price gains, forecasts inflation will be about zero this year. It said in October it will maintain a no-appreciation stance in its exchange rate policy, refraining from further monetary easing after opting for a de-facto devaluation of the Singapore dollar in April to counter collapsing exports.

Policy Changes

The Singapore dollar has gained about 3.2 percent in the past six months against the U.S. currency. It fell 0.5 percent to S$1.4119 against the U.S. dollar as at 12:55 p.m. local time.

Australia and Vietnam raised interest rates this quarter to contain inflation. In India, where wholesale food prices are rising at the fastest pace in 11 years, central bank Governor Duvvuri Subbarao said this month that monetary policy, while an “ineffective instrument” to rein in food costs, may be needed to damp inflation expectations.

Bank of Korea Governor Lee Seong Tae said this month the central bank shouldn’t wait too long before gradually raising interest rates, held at a record-low 2 percent since February.

Food prices, which make up 23 percent of Singapore’s consumer price index, rose 0.7 percent in November from a year earlier, after climbing 0.8 percent the previous month. Transport and communications costs climbed 2.4 percent, while housing prices slid 4.6 percent.

Consumer prices will probably rise 0.3 percent in 2009 and 2.8 percent next year, according to the median forecast in a quarterly survey of economists by the Monetary Authority of Singapore released Dec. 9. The central bank forecasts inflation will average 2.5 percent to 3.5 percent in 2010.

“We expect inflation to return modestly by year end and for it to continue climbing in the first quarter next year,” said Matt Hildebrandt, an economist at JPMorgan Chase & Co. in Singapore.

Source

The initial lineup has been announced for the annual Country Thunder concert in Florence, scheduled for April 14-17:

• April 14: The Grascals, Eric Church and Neal McCoy.
• April 15: Collin Raye, Jo Dee Messina, Gary Allan and Miranda Lambert.
• April 16: Love & Theft, Trailer Choir, Randy Houser, Big Kenny, Kevin Costner & Modern West and Keith Urban.
• April 17: Jason Jones, Kate & Kacey, Gloriana, Luke Bryan, Willie Nelson and Kid Rock Faxless payday loans.

For a limited time, general admission seats are being sold for $99 for all four days. VIP and reserved seats range from $200 to $500.

Camping sites range from $89 to $159.

For more and to purchase tickets: www.countrythunder.com.

Source

Australian retail sales rose in October as households spent more at department stores and restaurants.

Sales climbed 0.3 percent from September, when they fell 0.2 percent, the Bureau of Statistics said in Sydney today. The result matched the median forecast of 19 economists surveyed by Bloomberg News.

Household spending is helping stoke an economic expansion forecast by the central bank to accelerate in 2010, extending 18 straight years of annual growth. Governor Glenn Stevens raised the benchmark interest rate this week by a quarter percentage point for an unprecedented third month amid a rebound in consumer confidence.

“I think we’ll have record Christmas” sales, Gerry Harvey, chairman of Australia’s biggest electronics retailer, Harvey Norman Holdings Ltd., said in an interview with Bloomberg television. “We’ve had very good sales figures in October and November and I can’t think of any reason why that won’t follow into December.”

Australia’s dollar maintained gains versus the U.S. dollar. The currency traded at 92.86 U.S. cents as of 11:49 a.m. in Sydney from 92.90 cents before the retail sales report and 92.48 cents yesterday in New York.

Spending at department stores rose 1.9 percent and restaurant sales gained 1.1 percent, today’s report showed. Consumers spent 0.2 percent less on clothing.

Consumer Confidence

Hardware store group Mitre 10 said yesterday that earnings before interest and tax of A$2.67 million ($2.47 million) in October boosted profit for the four months through Oct. 31 to A$6.44 million, compared with a loss of A$239,000 for the same period a year earlier.

Consumer confidence is close to its highest level in more than two years, boosted by an increase in employment in October and higher wages.

Central bank policy makers increased the overnight cash rate target to 3.75 percent from 3.5 percent on Dec. 1, citing evidence that the economy, which skirted the global recession, “is in a gradual recovery.”

Gross domestic product rose 1 percent in the first half of the year and is forecast by the Reserve Bank to climb 3.25 percent next year and in 2011. Third-quarter GDP figures will be published on Dec. 16.

Investors are betting there is a 46 percent chance Stevens will boost the benchmark rate by a quarter point to 4 percent at the central bank’s next meeting on Feb. 2, according to interbank futures on the Sydney Futures Exchange at 6:24 a.m.

Rate Threat

Still, some retailers say the central bank’s interest-rate increases in October, November and this month will prompt consumers to reduce spending in coming months.

This year’s interest-rate increases add about A$150 to monthly repayments on an average A$300,000 home loan, and may prompt consumers to trim spending that surged in the first half of the year after Prime Minister Kevin Rudd distributed more than A$20 billion in cash handouts to households.

The cost to some home borrowers will be even higher after Westpac Banking Corp., Australia’s second-largest lender, increased its standard variable home-loan rate by 45 basis points after this week’s central-bank decision. A basis point is 0.01 percentage point.

Christmas trading is expected to be “subdued” in New South Wales, Australia’s largest state, according to a quarterly survey published today.

“The last quarter has been disappointing for many small businesses in New South Wales, with most of the gains made during the previous quarter negated,” said Christena Singh, author of today’s Sensis Business index report.

Source

Shares of Internet retailer Amazon.com Inc hit an all-time high of $135.01 on a split-adjusted basis on Monday as the stock rose more than 2 percent.

The run-up in the shares comes on “Cyber Monday,” a day billed as a search for bargains on the Internet after the Thanksgiving Day holiday weekend.

(Reporting by Ellis Mnyandu; Editing by Padraic Cassidy)

Read more

Federal Labour Minister Rona Ambrose is urging the union representing striking Canadian National Railway locomotive engineers to accept binding arbitration as management tried to keep the trains running Saturday.

Ambrose said in a statement she’s "disappointed" the Teamsters union and CN couldn’t reach an agreement before some 1,700 engineers across the country walked off the job Friday at midnight.

Despite sharing several railways in the GTA, CN representatives say GO Transit will not be affected by the engineers strike.

Ambrose said CN has already agreed to binding arbitration and the government is ready to appoint an arbitrator once the union gives its approval.

The Teamsters did not immediately respond Saturday to Ambrose’s statement.

The union has said a strike could have been postponed had the railway agreed to negotiate and not impose a 1.5 per cent wage increase and new mileage caps.

CN made contractual changes after three days of negotiations broke off Nov. 20 following 14 months of talks.

The Teamsters Canada Rail Conference (TCRC) responded by issuing a 72-hour strike notice, saying CN was effectively locking out employees by unilaterally changing the terms of the collective agreement.

TCRC president Daniel Shewchuk said in an interview Saturday that while the union made "substantial movement" during Friday’s talks, the railway wouldn’t budge.

The union has said raising the mileage cap – the maximum distance engineers can travel in one month – by 500 miles to 4,300 mileswould require some workers to work seven days a week, with no time off, and cause layoffs. CN says its locomotive engineers work on average 37 hours a week, and the new cap would increase that to 41 hours.

Source