Business
US Job Market Improves As Unemployment Falls
The American job market improved modestly in October and economists looking deeper into the numbers found reasons for optimism , or at least what counts for optimism in this agonizingly slow economic recovery, the Associated Press reports.
The nation added 80,000 jobs. That was fewer than the 100,000 that economists expected, but it was the 13th consecutive month of job gains. Fears of a new recession that loomed over the economy this summer have receded.
The unemployment rate nudged down, to 9 per cent from 9.1 in September.
“Those are pretty good signs,” said Michael Hanson, senior economist at Bank of America Merrill Lynch. “We’re hanging in there.”
No one looking at Friday’s report from the Labor Department saw a quick end to the high unemployment that has plagued the nation for three years. The jobless rate has been 9 percent or higher for all but two months since June 2009.
The government uses a survey of mostly large companies and government agencies to determine how many jobs were added or lost each month. It uses a separate survey of households to determine the unemployment rate.
The household survey picked up a much bigger job gain, 277,000 in October, and an average of 335,000 per month for the last three months. The household survey picks up hiring by companies of all sizes, including small businesses.
The household survey is more volatile and less comprehensive than the other survey, and is not followed as closely by economists. Still, job growth in the household survey has not been this strong for three months since the end of 2006.
People counting themselves self-employed increased by 200,000 in October, accounting for most of the increase, but it is difficult for economists to explain the three-month trend.
The job market turned consistently negative in February 2008. The nation lost jobs for 25 months in a row, almost 8.8 million in all. Since then, the economy has only recovered 2.3 million jobs. The adult nonmilitary population has grown 7.5 million.
The Federal Reserve earlier this week lowered its economic forecast for the rest of this year, and said unemployment is not expected to fall significantly through the end of next year. It should still be at 8 per cent even through 2013, the Fed said.
President Barack Obama will almost certainly go before voters next November with the highest unemployment of any sitting president seeking re-election since World War II. The highest so far was Gerald Ford, who faced 7.8 per cent unemployment in 1976 and lost to Jimmy Carter. Ronald Reagan faced 7.2 per cent unemployment in 1984 and beat Walter Mondale in a landslide.
Obama, appearing at the G-20 economic summit in Cannes, France, said the U.S. economy is growing “way too slow.” He repeated his call for Republicans in Congress to pass his $447 billion jobs bill, a mix of tax cuts and spending on roads and rail lines.
“There’s no excuse for inaction,” the president said.
On Thursday, Republicans in the Senate blocked a $60 billion measure for building and repairing infrastructure, the third in a string of defeats for Obama’s jobs agenda. Republicans opposed it because it was tied to a tax surcharge for the wealthy and because they said it cost too much.
Republicans laid blame on Obama and Democrats in Congress for the economy’s problems.
“At virtually every step of the way, President Obama and Democrats have increased uncertainty,” said Rep. Kevin Brady, R-Texas. “This has discouraged businesses from making new investments.”
Hiring last month was broad. Professional and business services, which include the accounting, engineering and temporary-help industries, added 32,000 jobs. Hotels, restaurants and entertainment companies added 22,000. Health care added 12,000.
The construction industry cut 20,000 jobs for the month, the most since January. That industry is examined closely because a pickup in the housing market could add force to the economic recovery.
The private sector added 104,000 jobs for the month, but state and local governments cut 24,000 jobs, resulting in the net increase of 80,000. State and local governments have cut 288,000 jobs this year. That’s unusual for an economic recovery, when state, local and federal governments typically are hiring workers.
But as the economy recovers and they receive more tax revenue, those layoffs should be limited in the months ahead, said Carl Riccadonna, senior U.S. economist at Deutsche Bank.
The number of discouraged workers, those who have given up looking for work and are no longer counted as unemployed, is down 47,000 from last year, at about 2.55 million. And there were fewer people with part-time jobs who were looking for full-time work, another positive sign.
The economy grew at an annual rate of 2.5 percent in July, August and September, its best performance in a year. In the first half of this year, the economy expanded at the slowest pace since the Great Recession ended in June 2009.
The stronger economy over the summer was powered by consumer spending, which grew three times as fast as it had this spring. Americans spent more even in the face of fears of a new recession and wild gyrations in the stock market.
Still, companies appear to be waiting for customer demand to pick up even more before they hire again in great numbers. People have been dipping into savings to finance their spending, and that may not be sustainable.
Companies learned during and after the recession to live with fewer employees. Worker productivity rose from July through September by the most in a year and a half. More productivity is usually good because companies can pay workers more without raising prices. But workers generally are not getting raises this time.
The Federal Reserve this week lowered its forecast of economic growth to 1.7 percent for this year, down from a forecast of 2.7 percent issued over the summer. It also says unemployment will not come down substantially through the end of 2012.
The economy has absorbed a series of body blows this year.
In the spring, the devastating earthquake and tsunami that struck Japan disrupted manufacturing of cars and other products in this country. The price of gas rose to a national average of almost $4 a gallon.
Then in the summer, Washington was seized by gridlock over whether to raise the borrowing limit for the federal government and how best to tackle the nation’s long-term debt problem.
More recently, economists have fretted over a debt crisis in Europe. Europe buys 20 percent of American exports, so a slowdown there would take a bite out of the U.S. economy, too.
The Greek prime minister this week called for a surprise popular vote on a European plan to bail out the debt-addled Greek economy. He later backed down, but even if Greece is stabilized, other European economies are weighed down by debt.
With a mission to ignite growth, encourage business continuity and help businesses and employees thrive, Eazipay is gearing up to propel the dreams of 150,000 SMEs and employees to new heights through her relief fund.
Gone are the days of financial constraints and stifled dreams. With Eazipay’s support, SMEs and employees alike can bid farewell to limitations and embrace a world of endless possibilities.
Whether it’s start up, business expansion or personal development, Eazipay is here to make dreams come true.
The mind-blowing initiative, which kicked off this month, would end in December, and will also offer a range of perks and benefits designed to put a smile on the faces of SMEs and employees alike.
From exclusive discounts to various advisory services and beyond, Eazipay is committed to spreading happiness and creating lasting impact in people’s lives and to the growth of businesses.
The technology company which offers products and services that range from payroll management to IT/Device management and assessments, “Eazipay isn’t just providing financial support but also unleashing a wave of growth and prosperity for SMEs and employees across the nation.
“Interested businesses and individuals can take part in this initiative directly from the Eazipay website: www.myeazipay.com”.
The Commissioner of Finance, Lagos State, Abayomi Oluyomi, has described Small and medium Enterprises (SMEs) as a critical engine for sustainable development in any economy.
He said this recently at the 10th anniversary of the Alert Group Microfinance Bank and the opening of their new head office in Lagos.
According to the National Bureau of Statistics, SMEs accounted for about 50 per cent of Nigeria’s gross.
He commended the positive impact of the Alert MFB as it empowers SMEs in the State.
“Alert MFB in the past 10 years has been at the forefront of empowering SMEs in Lagos State, disbursing over N30bn in loans to over 30,000 individuals having small to medium businesses over that period, which is quite remarkable”, he said.
Speaking, the Group Managing Director of Alert Group, Dr Kazeem Olanrewaju, revealed that the financial institution commenced business in 2013 as a microfinance bank.
“We started this journey in 2013 and it has been expanding. Today, they have about 10 branches across Lagos. They have supported well over 30,000 clients and have disbursed over N30bn.
“The company has been profitable since the second year. Looking at the market and the available opportunity, the Alert MFB board decided to come together to establish a Microfinance Institute (MFI), which is the Auto Bucks Lenders”, Dr. Olanrewaju said.
The GMD further stated that the company was focused more on supporting businesses and small and medium enterprises.
“The loan to support business represents over 98 per cent. The consumer loans you will see are the ones given to entrepreneurs. So, the area of focus of Alert MFB and Auto Bucks Lenders is to support businesses across the country.
“With the establishment of Auto Bucks Lenders, we have the opportunity to also do business outside Lagos. So, presently, we have offices in Ogun State and Oyo State. We intend to go to every part of Nigeria to support what we are doing”, he declared.
The cement market, in the last couple of weeks, has seen a significant turnaround with prices tumbling from between N10,000 and N15,000 per 50kg bag to between N7,000 and N8,000.
The sudden rise in the prices of cement and other major building materials in February this year upsets the construction industry, especially in real estate, where many developers were forced to abandon building sites.
A recent market survey conducted by The Tide’s source in different locations across the country confirmed a price drop, ranging between N7,000 and N7,500 per bag, though BUA cement is selling for N7,500 to N7,800 per 50kg bag, depending on location.
Both entrepreneurs and major distributors who were interviewed, explained that the price drop is due to low demand and government’s intervention.
At the peak of the price hike, the Federal Government called a meeting with major producers where it was agreed that a bag of cement should be between for N7,000 to N8,000, depending on location.
But the producers did not comply with this agreement immediately, followin which “Nigerians stopped demanding for cement; many project sites were abandoned as developers sat back and waited for the prices to come down.
“So, what has happened is an inter-play of demand and supply with price responding, which is Economics at work”, Collins Okpala, a cement dealer, told the source in Abuja.
In the Nyanya area of the Federal Capital Territory, a 50-kg bag of Dangote cement now sells for between N7,000 and N7,500, while BUA cement sells for between N8,500 and N9,500, down from between N11,000 and N12,000 respectively.
In Lagos, the product has seen significant price drop too. In Ojo area of the state, Sebastin Ovie, a dealer, told our reporter that what has happened is a crash from the January price, attributing the crash to low demand and stronger naira.
“The current price of the product is between N7,000 and N7,500 per 50kg bag, depending on the brand. This is a significant drop from the average of N12,000 which most dealers were selling in February and March”, he said.
A dealer in Agege area of the state who identified himself as Taofik Olateju, told the source that sales are picking up due to the drop in price.
He recalled that Nigerians at a point stopped buying due to the high price of the product at N15,000 per bag.
“I am sure most dealers ran at a loss then because we had mainly old stocks which we wanted to offload quickly”, he said, confirming that the product sells for between N7,500 and N8,000, depending on the brand and the demand for the brand.
Continuing, Olateju noted that “because the naira is now doing well against the dollar, it will be unreasonable for manufacturers to continue to sell the product at the old prices. I also believe that the federal government’s intervention and the threat to license more importers may have worked, leading to the reduction in price”.
In Enugu, the source reports that the product sells for between N7,200 and N7,500 depending on the brand and location.
“This is a city where the price of a 50kg bag went for as high as N12,000 and N13,000 in some cases in February and March”, Samuel Chikwendu said.
He added that the prices of other building materials, especially iron rods, have also dropped considerably which is why, he said, activities are picking up again at construction sites.
The story is slightly different in Owerri, the capital of Imo State, where Innocent Okonkwo told the source that low demand was also driving the price drop, adding that a 50kg bag was selling for N9,000 on the average in the state.
Sundry market observers are optimistic of further price reductions, but they remain cautious as manufacturers, wholesalers, and retailers continue to play critical roles in setting prices for end-users.
They lamented, however, that despite Nigeria’s status as one of the largest producers of cement in Africa, the price of the product continues to rise, particularly in the face of high inflation impacting the building materials market generally.
Okpala in Abuja highlighted the variations arising from direct sourcing from manufacturers versus procurement through dealers, with traders holding old stocks selling products at prices ranging from N8,500, N8,300 to N8,000 per bag.
Lucy Nwachukwu, another dealer in Abuja, said the significance of procurement volume in determining cement costs, noting that stability in prices has been observed over the past month, with the product retailing for between N7,000 and N7,800 depending on the brand.
In Port Harcourt also, a customer, Daniel Etteobong Effiong, said the price goes between N7500 to N8500, depending on the brand and the location one is buying from.
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