Mr GJ (your quick!) - but here's some details on job data(Bold edits are mine-of course):
U.S. Jobless Rate Fell to 4% in June;Private Jobs Up 206,000
By Vincent Del Giudice
Washington, July 7 (Bloomberg) -- The U.S. unemployment rate fell to 4 percent
in June and businesses added fewer jobs than expected, Labor Department
figures showed.
The unemployment rate fell from 4.1 percent in May and was close to April's
30-year low of 3.9 percent in April, the government said. Businesses added
206,000 jobs after losing 165,000 a month earlier. Government jobs fell 195,000
as temporary employees hired for the 2000 Census completed their work.
Combined, private and government payrolls grew 11,000 in June, after gaining
171,000 in May. Manufacturing, construction and retail jobs barely increased
after declines in May.
So far this year, businesses have added an average of 177,000 jobs a month,
compared with 202,000 a month for all of last year, the Labor Department said.
That could be ``viewed as another signal the economy is truly slowing down,''
said Kevin Flanagan, an economist at Morgan Stanley Dean Witter in New York,
before the report.
Today's report suggests Federal Reserve policy-makers may refrain from raising
interest rates at their Aug. 22 meeting. ``The Fed is almost out of the picture,''
said Chris Low, an economist at First Tennessee Capital Markets in New York,
before the report.
The Labor Department also reported that workers' average hourly earnings rose
0.4 percent, or 5 cents during June. That followed a 0.1 percent gain in May.
Labor expenses represent about two-thirds of the cost of doing business.
Expectations
Before today's report, analysts had expected a 4 percent unemployment rate
during June, an increase of 250,000 non-farm jobs -- including and excluding
government hiring -- and a 0.4 percent increase in average hourly earnings,
according to a Bloomberg News survey.
By category, services employment fell 2,000 in June -- after rising 209,000 in
May and reflecting the drop in government jobs. Construction employment rose
3,000 jobs last month after dropping 24,000 a month earlier. Factories added
8,000 jobs in June following a drop of 12,000 in May.
The Labor Department also said:
-- The available labor pool -- combining the number of unemployed job seekers,
plus those not looking for work in the last 12 months who said they would take a
job -- fell to 9.8 million in June from 10.2 million in May.
-- The percentage of the U.S. population holding jobs rose 64.5 percent in June
from 64.3 percent in May.
-- Average weekly hours worked rose to 34.5 in June from 34.4 in May.
-- Manufacturing overtime rose to 4.6 hours in June from 4.5 hours in May.
-- Average weekly earnings rose to $473 during June from $469.90 in May.
The government's monthly job growth figures are based on statistics provided by
businesses, while the unemployment rate is based on a survey of U.S.
households.
Fed Policy
In an effort to prevent inflation from accelerating, the Federal Reserve has
attempted to slow the pace of economic growth by raising the overnight bank
lending rate six times over the past 12 months. At its last session June 27-28,
the Fed's policy panel, the Federal Open Market Committee, left the left interest
rate target unchanged at 6.5 percent. However, the Fed cautioned the economy
is still growing at a pace could warrant further action. The FOMC next meets
Aug. 22.
Evidence of a slowdown in the economy is mounting. Manufacturing expanded in
June at the slowest pace in 17 months, according to the National Association of
Purchasing Management's factory index released earlier this week. June's
reading of 51.8 was the lowest since January 1999, when manufacturing began to
climb out of a yearlong slump in export sales to Asia and Latin America.
Sales at U.S. retail sales open at least a year rose 3.4 percent in June, the
smallest increase in almost three years, according to the Bank of
Tokyo-Mitsubishi Ltd.(Beware - Japanese reporting data!)
Wal-Mart
Wal-Mart Stores Inc., the world's largest retailer, and Nordstrom Inc. had
same-store sales that were below analysts' estimates on sluggish demand for
clothing. Many chains marked down prices in late June to clear excess
inventory, leading several retailers including Gap Inc. to warn about profit.
The weaker-than-expected June sales follow back-to-back declines in overall
retail sales in May and April.
Retail jobs rose 49,000 in June after a 116,000 drop in May, the Labor
Department reported. During the first half of the year, retail employment growth
averaged 32,000 a month, about the same as for all of 1999.
Jobs at finance, insurance and real estate companies dropped 6,000, the fourth
straight monthly decrease. Merrill Lynch & Co. is considering cutting 2,000 jobs
from its brokerage unit, or about 5.4 percent of the total, the Wall Street Journal
reported, citing people close to the firm.
The biggest U.S. broker would eliminate marketing, strategy and technology jobs
from its retail unit, which employs about 37,000 people, the Journal said. The
cuts would exceed earlier estimates for several hundred job losses and could
save the firm as much as $150 million a year.
Profits on Wall Street are slowing as income from trading, investments and
investment banking slide, analysts said. Eliminating 2,000 jobs would be the
biggest reduction since 1998, when Merrill slashed 3,400 positions following
Russia's default on its debt.
Potlatch Corp., a maker of tissue paper and lumber, said it will fire 260
employees, or about 3.7 percent of its workforce, as the company struggles to
meet profit forecasts.
In the past two quarters, Potlatch, which had 7,000 employees as of December,
warned that profit would be below estimates because of costs related to
problems at a mill that makes the raw material to manufacture paper. The
company, based in Spokane, Washington, projected $21 million in annual pretax
savings from the firings.
Several recent manufacturing reports have shown that demand for goods related
to housing, autos and other interest-rate sensitive industries have started to slow,
while production of business equipment -- especially computers and
semiconductors -- continues strong.
Orders for durable goods rose 6 percent in May, mostly because of a 26 percent
jump in demand for electronic goods, the Commerce Department reported last
week.
That means more workers for technology companies. International Business
Machines Corp. plans to hire 2,000 people and spend more than $2 billion in the
next two years to expand its design and sales of computer programs that run
Web sites. Corning Inc., the No. 1 maker of glass fiber for high-speed
communications, plans to hire 700 workers and double the capacity of a factory
in Erwin, New York.
-
(Meanwhile, Merrill Lynch just announced a cutback in brokerage support jobs |
