German Unemployment Declines in May as Jobs Boom Expands

(Bloomberg) -- German unemployment fell in May for a 23rd straight month as export-driven growth and increased spending by businesses and consumers extended a jobs boom.

The number of people out of work dropped a seasonally adjusted 8,000 to 2.97 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast a drop of 30,000, according to the median forecast of 30 estimates in a Bloomberg News survey. The jobless rate declined to 7 percent, the lowest since records for a reunified Germany began in 1991.

Declining unemployment in Europe’s biggest economy underscores German resilience in the face of a clampdown on budget deficits by euro-area governments buffeted by the debt crisis and rising fuel prices that crimp household spending. Retail sales edged up in April after declining in March, the Federal Statistics Office said today.

“The labour market party continues,” said Carsten Brzeski, an economist at ING Group in Brussels. “Even if the strong dynamics of new vacancies and employment expectations is currently slowing down somewhat, unemployment is bound to drop further.”

The euro was up 0.95 percent to $1.4413 as of 10:30 a.m. in Berlin.

Germany and neighboring France are driving euro-area growth even as countries such as Greece, that were forced to call for international bailouts, grapple with their debt burden.

BMW, Mini

The German economy may grow more than 3 percent for a second year in 2011 as it sustains a “robust” recovery, the International Monetary Fund said on May 17. German business confidence unexpectedly held steady this past month on the back of company investment and a rebound in construction. Economists had forecast a decline.

German carmakers are hiring because of booming demand in China for high-end vehicles. Bayerische Motoren Werke AG Chief Executive Officer Norbert Reithofer said on May 12 the Munich- based company will hire about 2,000 workers over the course of the year, more than half of them in Germany, “in light of strong global demand for BMW, Mini and Rolls-Royce brand vehicles.”

Siemens AG, Europe’s largest engineering company, said May 4 that profit will rise at least 75 percent this year as customers buy more industrial equipment.

Even so, signs are emerging that Germany’s labor market may be losing steam, said Timo Klein, an economist at Global Insight Inc. in Frankfurt.

‘A Cooling’

“It’s definitely looking better now than it was a half year ago,” Klein said in an interview. “But if you look at the current figures, in terms of economic activity, the indications are that we’re already seeing a bit of a cooling.”

The pace of Germany’s economic growth will probably slow by mid-year after jumping 1.5 percent in the first quarter, the Finance Ministry said May 20.

German output “was clearly lifted during the reporting period by backloading and catching-up effects,” the Frankfurt- based Bundesbank said the same day.

With retail sales increasing 0.6 percent in April from March, when they fell 2.7 percent, “the German consumer is hesitantly driving growth and picking up the economic relay baton from trade and investment,” said Christian Schulz, an economist at Joh. Berenberg Gossler & Co. in London.

OECD Comparisons

According to comparable data from the Organization for Economic Cooperation and Development, Germany’s jobless rate was 6.3 percent in March while the average for the 17 euro nations was 9.9 percent. France, the second-largest euro-area economy, had 9.5 percent unemployment, the U.S. 8.8 percent and Spain 20.7 percent.

Even so, joblessness at a 19-year low and buoyant economic growth has yet to translate into support for Chancellor Angela Merkel, whose Christian Democratic bloc dropped to match its year low of 30 percent in a Forsa poll for Stern magazine today.

Merkel’s coalition with the Free Democrats had 34 percent support compared with 50 percent for the opposition Social Democratic Party and Greens, who engineered a phase-out of nuclear power that Merkel emulated yesterday, the poll showed. Forsa polled 2,501 voters on May 23-27. The margin of error was as much as 2.5 percentage points.

Jobless rate at 9.7%; 216K jobs lost in August

The unemployment rate rose to 9.7 percent in August, the highest since June 1983, as employers eliminated a net total of 216,000 jobs.

Analysts expect businesses will be reluctant to hire until they are convinced the economy is on a firm path to recovery. Many private economists, and the Federal Reserve, expect the unemployment rate to top 10 percent by the end of this year.

While the jobless rate rose more than expected, the number of job cuts is less than July's upwardly revised total of 276,000 and the lowest in a year, according to Labor Department data released Friday. Economists expected the unemployment rate to rise to 9.5 percent from July's 9.4 percent and job reductions to total 225,000.

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the so-called underemployment rate reached 16.8 percent, the highest on records dating from 1994.

But earnings rose and the number of hours worked stayed above a recent record-low. Average hourly wages increased to $18.65 from $18.59, the department reported. Average weekly earnings increased to $617.32.

The number of weekly hours worked remained at 33.1, above the low of 33 reached in June. That figure is important because economists expect companies will add more hours for current workers before they hire new ones.

The recession has eliminated a net total of 6.9 million jobs since it began in December 2007. There are now 14.9 million Americans unemployed.

Unemployment hits 26-year high

Job losses in June bigger than expected as nationwide jobless rate reaches 9.5 percent

WASHINGTON — The government report Thursday that the nation's unemployment picture took an unexpectedly sharp turn for the worse after four straight months of moderately encouraging news was a sobering jolt to hopes that the economy might gradually be getting back on track.

The overall unemployment rate edged up just a notch, to a 26-year high of 9.5 percent in June, but the loss of 467,000 payroll jobs made it clear that the worst economic crisis since the Great Depression was far from over - at least for American workers.

And the size of the payroll loss was unexpected and reversed a four-month trend in which the size of the loss had been shrinking from the January peak of 741,000 jobs eliminated.

Since the recession began in December 2007, the ranks of the unemployed have almost doubled to 14.7 million, and nonfarm employers have eliminated 6.5 million jobs.

"This is the only recession since the Great Depression to wipe out all the jobs growth from the previous business cycle," said EPI economist Heidi Shierholz.

US Job Losses Slow Markedly, But Jobless Rate Jumps

WASHINGTON (Dow Jones)--U.S. job losses softened markedly last month, sending one of the strongest signals yet that the severe recession may be winding down.

Still, another jump in the unemployment rate to a fresh 25-year high served as a sober reminder that even if the economy does stabilize in coming weeks, a rapid return to growth is unlikely given the pressures households face from a sluggish labor market.

Non-farm payrolls slid 345,000 in May, the U.S. Labor Department said Friday, well below the 525,000 decline economists in a Dow Jones Newswires survey had expected. Last month's drop was the smallest since September 2008, when the recession intensified in the wake of the collapse of Lehman Brothers.

"It looks like the economy has hit bottom and the recession is all but over," said Chris Rupkey, economist at Bank of Tokyo-Mitsubishi, though "full recovery is several months away." The economy has now lost six million jobs since the recession started in December 2007, with most of those losses occurring in the last six months. The 17-straight monthly job losses matches the record reached during the 1981-1982 recession.

"Jobless losses continued to be widespread in May, but the rate of decline moderated in construction and several service-producing industries," said Keith Hall, Commissioner of the Bureau of Labor Statistics.

The unemployment rate, calculated using a survey of households as opposed to companies, increased 0.5 percentage point to 9.4%, the highest level since August 1983. Economists had expected a 9.2% rate.

Many economists expect that rate to top 10% soon. Not only does the economy have to stop losing jobs before the jobless rate stabilizes, it actually has to add payrolls at a modest rate just to keep up with new entrants into the labor force.

In Congressional testimony Wednesday, Federal Reserve Chairman Ben Bernanke warned that the labor market "tends to lag" the business cycle, "and so even as the economy begins to recover, unemployment can still remain high."

By broader measures, unemployment - or at least underemployment - is already well into double digits. When marginally attached and involuntary part-time workers are included, the rate of unemployed or underemployed workers hit 16.4% last month, up from 15.8% in April and almost seven percentage points higher than it was one year ago.

Still, the deceleration in layoffs is welcome news at a time when other indicators suggest the recession may be nearing an end. The Institute for Supply Management manufacturing index increased in May from April, as did automobile sales, an indication that businesses and consumers alike may be finding their footing.

Average hourly earnings advanced $0.02 to $18.54. That was up just 3.1% from one year ago, a sign that inflation isn't a threat. However, stagnant wages could also weigh on consumer spending.

According to Friday's report, hiring last month in goods-producing industries fell by 225,000. Within this group, manufacturing firms cut 156,000 jobs, bringing the total since the recession began to 1.8 million.

In contrast, construction employment was down just 59,000 last month, the smallest decline since September.

Service-sector employment fell 120,000, well below its peak losses of nearly 400,000. Business and professional services companies shed 51,000 jobs, and financial-sector payrolls were down another 30,000.

Retail trade cut 17,500 jobs, while leisure and hospitality businesses added 3,000 an indication that households may be boosting non-essential spending.

In a positive signal for future employment prospects, temporary employment - which economists consider a leading indicator - fell by only 6,500, its best performance in many months.

Education and health care added 44,000 jobs.

The government shed 7,000.

The average workweek was down 0.1 hour at 33.1 hours, a record low. A separate index of aggregate weekly hours fell 0.7 percentage point to 99.7.

Job market shows signs of improvement

Reports show narrower decline in private-sector job losses and slight drop in announced job cuts.

The pace of U.S. job losses -- while still fairly strong -- may be abating, according to a couple of reports released Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employers cut 532,000 jobs in May, a 2.4% improvement from the revised 545,000 drop in April.

Economists surveyed by Briefing.com expected a more modest loss of 525,000 jobs last month. ADP originally reported a loss of 491,000 private-sector jobs in April.

ADP said that despite recent signs of a burgeoning recovery, employers will likely continue to cut jobs for the next couple of months, but not as quickly as in the past six months.

"It's quite likely that employment has another million or million and a quarter to fall," said Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC.

Large businesses, those with 500 or more workers, shed 100,000 jobs. Medium-sized businesses, with between 50 and 499 workers, chopped 223,000 workers. And small-businesses, those with less than 50 workers, shed 209,000 jobs.

The manufacturing and financial sectors were hard hit last month, according to the report. In its 39th consecutive monthly decline, the manufacturing sector lost 149,000 jobs. The financial sector lost 32,000 jobs in its 18th consecutive monthly decline.

"This was a weak report with the weakness widespread," Prakken said. However, "maybe we're starting to see some moderation in these job losses."

"The free fall in the economy is likely over," he said.

The report is based on anonymous payroll data that represents 400,000 of ADP's 500,000 domestic business clients and about 24 million employees across a broad range of industries.

Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of job cuts announced in May fell for the fourth straight month.

Challenger said job cut announcements by U.S. employers totaled 111,182 in May, an improvement of 16% from April's 132,590 cuts. It was the lowest total since last September, according to Challenger, but the May figure was still 7.4% higher than job cuts announced in the same month a year ago.

As states struggle with rising deficits, the government/non-profit sector was hit the hardest for the third month in a row, Challenger said, with 22,317 announced job cuts in May. The computer sector had the second highest tally of planned cuts, followed by the chemical and automotive industries.

While job cut totals have steadily fallen since January, growing unemployment is still a major concern.

"This decline in job cuts could be short-lived," John Challenger, chief executive officer of Challenger, Gray & Christmas said in a statement.

"The second quarter is typically the lowest quarter of the year when it comes to job cuts. Corporate downsizing may continue to remain slow during the summer months, but if the past is any indication, we could see the pace accelerate again in the latter half of the third quarter through the end of the year," he said.

Employers have announced 822,282 job cuts so far this year. That is more than double the 394,193 job cuts announced through this point of 2008, Challenger said.

The reports pave the way for the government's monthly jobs report due Friday. The Labor Department report is expected to show that the economy shed 550,000 jobs in May, slightly more than the 539,000 reported for April, according to a consensus estimate of economists complied by Briefing.com. The unemployment rate is predicted to rise to 9.2% from 8.9%.

Jobless claims surge

Government says 637,000 people filed for first-time unemployment benefits last week. Continuing claims at all-time high for 15th week in a row.

NEW YORK (CNNMoney.com) -- The number of people filing initial claims for unemployment benefits rose more than expected last week, while the number of people filing claims on an ongoing basis rose to a record high for the 15th straight week, according to a government report released Thursday.

A total of 637,000 people filed new claims for jobless benefits in the week ended May 9, the Labor Department said. That's an increase of 32,000 from an upwardly revised 605,000 in the previous week.

The tally was higher than expected. Economists surveyed by Briefing.com had forecast 610,000 initial claims.

The 4-week moving average of initial claims, which smoothes out volatility in the measure, rose 6,000 to 630,500.

Thursday's report could reflect filings by Chrysler employees affected by the automaker's declaration of bankruptcy last month, analysts said.

Hedge Funds Hemorrhaging Jobs

The hedge fund sector's worldwide headcount could shrink by 20,000 jobs or 14 percent in 2009, according to a new forecast byOptions Group, a recruiting and strategic consulting firm focused on the financial services industry.

Hardest hit are sales and investor relations staff, followed by back-office operations staff and traders, Options Group says. Forecast job losses will be greatest in the New York area and London, followed by Hong Kong and Tokyo.

"It's across the board," Options Group Chief Executive Michael Karptold Reuters. "Funds are looking to lay off people who are not revenue generators, the people whose ideas are not generating alpha."

Investors continue withdrawing money from hedge funds, further depleting assets already compressed by market losses. Since a portion of fund fees are based on the amount of assets under management, revenue at most firms is falling in tandem with assets. That's what happened last year, when hundreds of funds shut down and industry employment shrank by 6.4 percent or about 10,000 jobs, to 145,000, according to Options Group.

Another Perspective

But another hedge-fund watcher cautions it's difficult to extrapolate from data on assets under management to predict changes in fee income or headcount. "It's very much back-of-the-envelope kind of math," says Neil Wilson, editorial director of Hedge Fund Intelligence, a firm that compiles news and data on the global hedge fund industry.

Funds that generate positive returns, which roughly a third of the industry did last year according to Wilson, earn extra fees for performance. So while worldwide hedge fund assets dropped 32 percent last year to $1.81 trillion, according to Hedge Fund Intelligence data, Wilson says industry-wide fee income might have declined more than 30 percent, or less than that.

Wilson also says direct employment at hedge funds probably is greater than 145,000, and indirect employment – via prime brokers and other outsourced services – accounts for still more jobs dependent on hedge fund business. And 20 percent of the industry's remaining assets are slated to be withdrawn by investors this year, he adds.

All of that suggests Options Group's forecast of 20,000 job losses this year or 14 percent of headcount is, if anything, conservative.

Jobless Claims Fall 31K To 639K

New U.S. claims for state unemployment benefits fell last week for only the third time since the start of the year, though they remained at a level consistent with a steep decline in February payrolls.

Initial claims for jobless benefits fell 31,000 to 639,000 after seasonal adjustments in the week ended Feb. 28, the Labor Department said in a weekly report. The previous week, already a 26-year high, was revised to show an even sharper drop of 670,000. Wall Street economists had expected a smaller decline of 12,000 last week, according to a Dow Jones Newswires survey. Jobless claims have nearly doubled in the last year.

The four-week average, which aims to smooth volatility in the data, rose 2,000 to 641,750, the highest since October 1982.