U.S. jobless rate falls to 8.9%, California's dips

A man checks job listings in New York. U.S. employers have added 192,000 jobs

The U.S. jobless rate unexpectedly fell to 8.9 percent, the lowest in almost two years, and employers added 192,000 jobs in a sign of growing confidence in the recovery, the Labor Department reported Friday.

Meanwhile, California's unemployment rate dipped slightly to 12.4 percent in January, the state Employment Development Department said.

The state reported a 12.5 percent unemployment rate in December. California's jobless rate has been at or above 12 percent for 17 months.

California added 12,500 nonfarm jobs in January, bringing the state's total to nearly 14 million. Gains were seen in five of 11 sectors surveyed, including construction, manufacturing and government. Education and financial, health and business services reported job losses.

Even with the slight drop in the unemployment rate, more than 2.2 million Californians remain out of work.

The nationwide increase in payrolls partly reflected a return to more seasonable weather and followed a 63,000 gain in January, Labor Department figures showed. The median estimate in a Bloomberg News survey of economists was for an addition of 196,000 jobs last month.

Manufacturing, construction and transportation were among industries adding workers, underscoring Federal Reserve Chairman Ben Bernanke's testimony to Congress this week that there are "grounds for optimism" about improvements in the labor market. Employment growth is giving Americans the means to keep spending at retailers such as J.C. Penney Co. and Macy's Inc.

"The economy has been clawing its way back up the side of the mountain for the better part of a year and these numbers are consistent with that," Paul O'Neill, a special adviser to Blackstone Group LP and a former Treasury secretary, said in an interview with Bloomberg Television. "Where we are is the process of natural healing of our economy."

The unemployment rate was projected to rise to 9.1 percent from 9 percent, according to the survey median. The number of unemployed fell by 190,000, and those employed rose by 250,000. The size of the labor force increased by 60,000.

Some U.S. companies are ramping up hiring. Intel Corp. in Santa Clara and Home Depot Inc. announced plans last month to hire thousands of workers.

President Obama last week told the first meeting of his panel of outside economic advisers that the United States must deal with stubbornly high unemployment even as the recovery is well under way.

"We still have a ways to go," Labor Secretary Hilda Solis said in an interview Friday with Bloomberg Television. "We still have a lot of people who need jobs."

Last month's increase in payrolls was the biggest since May. If sustained, that pace would reduce the unemployment rate to 6.9 percent by November 2012, when Obama faces re-election, said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC. The rate was 7.8 percent when Obama took office in January 2009.

Read more:

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/03/04/BU3G1I48UC.DTL#ixzz1FhQJPoyd

Retirees Expect to Live on $190 a Month of Retirement?

Retirement Funds of $190 a Month?

In a survey done by Wells Fargo, 2,000 Americans aged 20 – 60 were asked how much they’re expecting to live on every month for their retirement. On average, it was found out that they’ll only have a budget of $190 per month.

This survey revealed a few things that should be a cause of concern. First, it was found out that Americans don’t have enough money in their savings for retirement and they may end up working even after they’re retired from their original jobs. Secondly, they’re underestimating the funds needed to live off of their retirement savings.

The figure was gotten on the respondents’ prediction that they’ll have $300,000 to spend for the 19 years of their retirement. For people in their 50’s, they only have savings of $29,000 on average which leads to $190 a month for 20 years if there’s a 5% return rate.

“$190 a month is not going to cut it,” said Laurie Nordquist. “This reinforces the huge gap in terms of what people are going to need and what people have. They have a little time to add to that nest egg, but it’s a huge shortfall to recover,” she followed. Nordquist is the co-head of Wells Fargo Institutional Retirement and Trust.

Read More

http://www.allabouttopnews.com/retirees-expect-to-live-on-190-a-month-of-retirement/851376/

Tax Deal Is Key to Avoid Recession, Obama Adviser

One of President Obama’s top economic advisers warned on Wednesday that the nation could slip back into recession if Congress did not pass the administration’s tax cut deal with Republicans, as the White House sought to press Democrats into backing the plan.

But Democrats in the House and Senate were still seething with anger — both about the substance of the deal, which includes keeping the Bush-era rates even on the highest incomes, and the way they were iced out of the negotiations. It was unclear that the ominous economic forecast would help. Senate Democrats said they were still pressing for changes to the plan, but Republicans and the White House showed no signs of flexibility.

Vice President Joseph R. Biden Jr., who failed on Tuesday to persuade many of his old Senate colleagues to get behind the plan, met with House Democrats for more than an hour on Wednesday. Dozens of lawmakers lined up to voice their displeasure, and to ask if there was any chance of reworking the plan, especially a provision setting a generous tax emption for wealthy estates.

“There is a substantial amount of dissatisfaction with the deal that was cut,” Representative Jim McDermott, Democrat of Washington, said after the meeting. “The Democratic caucus put itself on notice that it would not vote for tax cuts for the wealthy because we can’t afford them and because they are not needed, and that’s the point one Democrat after another is making.”

The continuing anger in Congress raised the likelihood that the tax deal would be approved largely with Republican votes. Enough Senate Democrats were expected to support the plan to surmount any filibuster. And in the House, given Republican support, it seemed possible for the tax plan to be adopted even with two-thirds or more of Democrats voting against it.

The deal would extend for two years the Bush-era tax cuts at all income levels, not just on income up to $250,000 per couple as President Obama had sought. In exchange, Republicans agreed to the administration’s demands for a 13-month continuation of jobless benefits for the long-term unemployed, a one-year reduction in the payroll tax for nearly all workers, and other steps aimed at lifting the economy.

The plan also includes an agreement to reduce the estate tax, which lapsed completely this year but is set to return on Jan. 1 with an exemption of $1 million per person and a maximum rate of 55 percent. The deal will set the exemption, or unified credit, at $5 million per estate, and the maximum rate at 35 percent — a higher exemption and lower tax than many Democrats want.

The Senate Republican leader, Mitch McConnell of Kentucky, excoriated Democrats for trying to bring up several other issues, including an immigration bill and a Pentagon policy measure that includes authorization to repeal the military’s “don’t ask, don’t tell” ban on open service by gay men and lesbians. Mr. McConnell urged the Democrats to bring the tax plan to the floor.

“Are we here to perform or to legislate?” Mr. McConnell asked, accusing the Democrats of forcing show votes on liberal ideals.

The majority leader, Harry Reid of Nevada, struggled on Wednesday to chart a path on several major items, including the tax proposal. Votes were tentatively scheduled for Thursday morning on the immigration measure, which would create a path to citizenship for certain illegal immigrants brought to the United States as young children, and on the military bill.

As attention focused mainly on the tax issue, House Democrats muscled through a stripped-down spending bill that would finance the federal government through Sept. 30 of next year, freezing the budgets of most agencies but including money for the war in Afghanistan.

The bill cuts nearly $46 billion from the president’s requested budget, and includes provisions for a two-year pay freeze for non-military federal employees.

The vote was 212 to 206, with 35 Democrats and all 171 Republicans in opposition.

With the president on the defensive with his own party, the White House marshaled an offensive that included circulating dozens of private-sector economic analyzes and endorsements from public officials.

But the big gun was the economic warning from Lawrence H. Summers, the soon-departing director of the White House National Economic Council.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip” recession, Mr. Summers told reporters at a briefing.

Mr. Obama, in a brief appearance with the president of Poland, rebutted a reporter’s question alluding to Congressional Democrats’ sense of betrayal.

“It is inaccurate to characterize Democrats writ large as feeling ‘betrayed,’ ” Mr. Obama said. “I think Democrats are looking at this bill, and you’ve already had a whole bunch of them who said this makes sense. And I think the more they look at it, the more of them are going to say this makes sense.”

The fight over the Bush-era rates would resume in the coming two years, Mr. Obama said, adding that he would make the case for “tax reform, that we’ve got to simplify the system.”

Read More

http://www.nytimes.com/2010/12/09/us/politics/09cong.html

In hopeful sign, number of job openings up

WASHINGTON — Employers posted a sharp increase in job openings in October, raising hopes that hiring could pick up in the coming months.

Businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month, the Labor Department said yesterday. That reverses two months of declines and is the highest total since August 2008, just before the financial crisis intensified.

Overall, the number of advertised jobs has increased by about 1 million, or 44 percent, since the low point of July 2009, a month after the recession ended. But openings are still far below the 4.4 million advertised in December in 2007, when the recession began.

The latest job openings data follows last week’s disappointing employment report for November. That showed the economy added a net total of only 39,000 jobs, a steep drop from the previous month, and the unemployment rate rose to 9.8 percent from 9.6 percent.

But some economists consider yesterday’s report, known as the Job Openings and Labor Turnover survey, to be a signal of how much hiring might take place one to three months after the period covered by the survey.

Jonathan Basile, an economist at Credit Suisse, said the JOLTS report echoes other recent data showing that the economy is improving. That improvement will likely translate into more hiring soon, he said.

Last week’s employment report “should turn out to be just a bump in the jobs recovery road,’’ Basile said.

Separately yesterday, the Federal Reserve reported that consumer borrowing rose in October by the largest amount in more than two years, led by a big rise in the category that includes student loans.

The Fed said consumer credit rose at an annual rate of $3.4 billion in October, the largest increase since a $5.7 billion gain in July 2008. Consumer credit was also up in September.

But the strength in both September and October is being heavily influenced as the result of a recently enacted law that makes the government the primary lender to students.

The increase of $3.4 billion in overall credit surpassed the flat reading that economists had expected. The gain translated into a 1.7 percent rise and followed a 0.6 percent increase in September. Those were the first back-to-back monthly gains since mid-2008.

Read More

http://www.boston.com/business/articles/2010/12/08/in_hopeful_sign_number_of_job_openings_up/