NPR’s Weekend Edition (3/5, Arnold) reported on the “steady job gains” that have been made in the US, many of them in manufacturing. The story highlights the successes of AccuRounds, “an advanced manufacturing facility in Avon, Mass.,” that “makes a broad range of precision-tooled metal parts.” The company has seen its orders increase over the past several months, and consequentially has begun a steady stream of hiring. Similar stories are being told across the manufacturing sector. This most recent decline in unemployment “doesn’t mean the unemployment problem is over. But companies are hiring at a pace that should continue to bring down unemployment slowly.”
Unemployment Falls Below 9%. The Los Angeles Times (3/5, Puzzanghera) reports “average Americans might look back on February 2011 as the point when the country finally turned the corner,” although the recession has technically been over since the middle of 2009. “The Labor Department said the economy added 192,000 new jobs last month, a sharp increase that helped trim the unemployment rate to 8.9% – the first time it has been below 9% in nearly two years.” Analysts pointed to the lowered unemployment, as well as “encouraging data on auto sales, chain store revenue and other economic barometers” as evidence that the US economy had likely reached “escape velocity” from the downturn. Energy prices, particularly oil volatility stemming from the unrest in Libya, remain a concern however.
Bloomberg News (3/5, Homan) reported, “Hiring was widespread, with manufacturing, construction and transportation companies adding workers, underscoring Federal Reserve Chairman Ben S. Bernanke’s testimony to Congress this week that there are ‘grounds for optimism’ in the labor market.” Bernanke cautioned that “the labor market ‘has improved only slowly,’ and it may take ‘several years’ for the unemployment rate to reach a ‘more normal level.'” Even so, he added, “we do see some grounds for optimism about the job market over the next few quarters, including notable declines in the unemployment rate in December and January, a drop in new claims for unemployment insurance, and an improvement in firms’ hiring plans.”
Falling Unemployment Not Cheering Liberals Or Conservatives. The AP (3/7, Kuhnhenn) reports unemployment “is dropping, but the reaction from both the left and right ends of the political spectrum is surprisingly unenthusiastic.” Conservatives “fear the improvement will weaken their argument that the way to bring back jobs is less regulation and more fiscal discipline,” but liberals “worry that better job numbers will create momentum for spending cuts that will cause the fragile recovery to falter.” The “divided reaction illustrates the ideological forces pulling at President Barack Obama as he tries to gain economic and political traction out of the positive jobs report.” Austan Goolsbee, chairman of Obama’s Council of Economic Advisers, said, “Overall, it’s a very solid jobs report. And overall there’s been increasing optimism that despite having a long way to go, we’re clearly headed in the right direction and we’re putting some miles behind us and trying to get back to a good situation.
Bloomberg News (3/7, Willis) reports, “US retail sales probably climbed in February by the most in four months, spurred by job growth and more seasonable temperatures,” according to a poll of economists taken by Bloomberg. “Chain-store sales did well, automobile sales improved sharply and employment bounced back” said one IHS Global Insight analyst. “Households may have realized that they have some extra cash in their pockets due to this year’s cut in the payroll tax.”
The Wall Street Journal (3/7, C1, Evans, subscription required) reports US companies have a record $1.4 trillion on hand, and there are indications that they are beginning to increase spending on new hires and dividends. The Journal notes Standard & Poors analyst Howard Silverblatt has reported 87 companies have increased dividends, while 7 additional companies have announced plans to pay a dividend, compared to 78 in the first quarter of last year. S&P forecasts dividends will reach $225 billion by the end of the year.
SME Daily Executive Briefing, March 7, 2011