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Posts Tagged ‘hiring’

Large Companies Hiring, Small Companies Not; Federal Hiring Strong, States Cutting Back; Proposed Solutions; Bright Side of Fed Policies

Unfortunately, after reading Mish’s article "Large Companies Hiring, Small Companies Not; Federal Hiring Strong, States Cutting Back; Proposed Solutions; Bright Side of Fed Policies," most of us are not going to be happy about what Mish calls the bright side. – Ilene

Courtesy of Mish

A recent Gallup survey suggests Larger U.S. Companies Are Hiring; Smallest Are Not

Gallup finds that larger companies are hiring more workers while the smallest businesses are shedding jobs. More than 4 in 10 employees (42%) at workplaces with at least 1,000 employees reported during the week ending Nov. 14 that their company was hiring, while 22% said their employer was letting people go. At the other extreme, 9% of workers in businesses with fewer than 10 employees said their employer was hiring, and 16% said their employer was letting people go.

This Gallup question about company size is new, so it is unclear whether this pattern is a continuation of, or a change from, the past.

Hiring Also Much Higher at the Federal Government

The federal government is hiring more employees than it is letting go, while the opposite is true for state and local governments. More than 4 in 10 federal employees (42%) say their organizations are adding people and 21% say they are letting workers go. In contrast, state and local government employees report a net loss of workers.

Pitfalls, Flaws, Observations 

There are huge flaws in the survey as well as a potential for additional flaws in analyzing the survey results. Nonetheless there are some important observations that can be made.

For starters, it is nice to see large corporations hiring, but there is no indication of by how much. Is the total headcount hiring 1 or hiring 2,000? Is the number up or down from last month?

Compounding that lack of information, we have seasonal flaws. Many retailers are now ramping up hiring for the Christmas season. So… is the hiring temporary or permanent?

The survey does not say. Moreover it does not say why they are hiring. Is business expanding or is this a short-term need?

That aside, the survey is not useless by any means. If this expansion was getting stronger, the number of companies hiring would be going up. It is not. Worse yet, small businesses which are the lifeblood of job creation, have not participated in the hiring…
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Weekly Claims Drop to 451,000, 4-Week Moving Average at 478,000; Where to From Here?

Weekly Claims Drop to 451,000, 4-Week Moving Average at 478,000; Where to From Here?

Courtesy of Mish 

Weekly Claims fell this week to 451,000 but that number is still consistent with an economy losing jobs.

Please consider the Unemployment Weekly Claims Report for September 9, 2010.

In the week ending Sept. 4, the advance figure for seasonally adjusted initial claims was 451,000, a decrease of 27,000 from the previous week’s revised figure of 478,000. The 4-week moving average was 477,750, a decrease of 9,250 from the previous week’s revised average of 487,000.

Unemployment Claims

The weekly claims numbers are volatile so it’s best to focus on the trend in the 4-week moving average.

4-Week Moving Average of Initial Claims

The 4-week moving average is still near the peak results of the last two recessions. It’s important to note those are raw numbers, not population adjusted. Nonetheless, the numbers do indicate broad, persistent weakness.

4-Week Moving Average of Initial Claims Since 2007

No Lasting Improvement for 8 Months

There has been no lasting improvement since December 2009, eight months ago. The above chart is slightly off, the Fed has not updated the series yet today. The last data point is at 451,000.

To be consistent with an economy adding jobs coming out of a recession, the number of claims needs to fall to the 400,000 level.

At some point employers will be as lean as they can get (and still stay in business). Yet, that does not mean businesses are about to go on a big hiring boom. Indeed, unless consumer spending picks up, they won’t.

Questions on the Weekly Claims vs. the Unemployment Rate

A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"

The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.

Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can…
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Banks Recruit Investors to Oppose Honest Valuation of Assets; Just how Unprepared are Banks for Major Losses?

Banks Recruit Investors to Oppose Honest Valuation of Assets; Just how Unprepared are Banks for Major Losses?

Courtesy of Mish 

Reader "Henry" has a question on the loan loss provision chart I posted in Former Fed Vice Chairman vs. Mish: Is the Fed Out of Ammo?

Henry writes …

Hello Mish,

Thanks for writing and sharing your wonderful column. It has been very informative and educational.

Could you please help us mere mortals decipher the ALLL/LLRNPT chart in a follow up post?

I have difficulty reconciling the units, and I suspect I’m not the only one. Exactly what does that chart depict?

Thanks.

Henry

From my previous post …

Assets at Banks whose ALLL Exceeds their Nonperforming Loans

The ALLL is a bank’s best estimate of the amount it will not be able to collect on its loans and leases based on current information and events. To fund the ALLL, the bank takes a periodic charge against earnings. Such a charge is called a provision for loan and lease losses.

One look at the above chart in light of an economy headed back into recession and a housing market already back in the toilet should be enough to convince anyone that banks already have insufficient loan loss provisions.

That is one of the reasons banks are reluctant to lend. Lack of creditworthy customers is a second. Quite frankly would be idiotic to force more lending in such an environment.

To further clarify, the chart depicts the ratio of loan loss provisions to nonperforming loans across the entire banking system (all banks). There are 33 ALLL charts by bank size and region for inquiring minds to consider. The above chart is the aggregate.

The implication what the chart suggests is that banks believe nonperforming loans are NOT a problem (or alternatively they are simply ignoring expected losses to goose earnings).

The implication what I suggest is banks earnings have been overstated. Why? Because provisions for loan losses are a hit to earnings. I believe losses are coming for which there are no provisions.

The chart depicts a form of "extend and pretend" and overvaluation of assets on bank balance sheets. The Fed and the accounting board ignore this happening (encourage is probably a better word), hoping the problem will get better. With more foreclosures and bankruptcies on the horizon, I suggest it won’t.

Magnitude of the Problem

The above…
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Small Businesses are Not Hiring – Why Should They?

Small Businesses are Not Hiring – Why Should They?

Courtesy of Mish 

Hand holding out empty pocket

In response to Creating Jobs Carries a Punishing Price, an article about Mr. Fleischer, president of Bogen Communications Inc. and why he is not hiring, I received an interesting email from "David" a reader who disagrees with Mr. Fleischer’s stated reasons for not hiring.

One of the items mentioned by Mr. Fleischer and challenged by "David" is the idea that corporations are sitting on cash. On this score, "David" is correct. I have also debunked the idea that corporations are sitting in cash (Please see Are Corporations Sitting on Piles of Cash?)

"David" also challenged Mr. Fleischer’s math on healthcare.

However, such arguments miss the entire point of the post.

Actions Matter!

It does not matter one iota if Mr. Fleischer is wrong about corporate sideline cash or anything else. What matters is Mr. Fleischer thinks he has sufficient reasons not to hire.

On that score, I believe Mr. Fleischer is correct. There are numerous good reasons to not hire.

Businesses have a legitimate worry about health care costs, rising taxes, and other artifacts of Obama’s legislation.

On the consumer side, this is not a typical recession. This is a credit bust recession with consumers still deleveraging. With savings deposits yielding close to 0% and with credit card rates over 20%, common sense dictates consumers pay down bills rather than make new purchases. The housing bubble has burst and boomers are headed into retirement with insufficient savings.

Given all the economic uncertainties, consumers are reacting in a rational manner by not spending. In turn, businesses have consistently cited lack of customers as one reason to not hire.

Pertinent Facts

That Mr. Fleischer fails to articulate reasons that others agree with is irrelevant. The pertinent fact is he is not hiring.

More importantly, numerous other small business owners think and act just like Mr. Fleischer. How do we know? Simple …

What Can Be Done?

For my thoughts on what to do about small business hiring, please…
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Four-Week Moving Average of Weekly Unemployment Claims Holds Steady near 460,000, No Progress for Seven Months

Four-Week Moving Average of Weekly Unemployment Claims Holds Steady near 460,000, No Progress for Seven Months

Courtesy of Mish 

Tack on another month of no progress with weekly unemployment claims. The 4-Week moving average is still hovering around the 450,000 to 460,000 level where it was in mid-December 2009.

Please consider the Unemployment Weekly Claims Report for July 17, 2010.

In the week ending July 17, the advance figure for seasonally adjusted initial claims was 464,000, an increase of 37,000 from the previous week’s revised figure of 427,000. The 4-week moving average was 456,000, an increase of 1,250 from the previous week’s revised average of 454,750.

Weekly Claims and 4-Week Moving Averages

Last week’s improvement in claims is an outlier primarily related to seasonal discrepancies in auto manufacturing workloads. The 4-week moving average smoothes out such fluctuations and is still hovering above 450,000,

The numbers are consistent with an economy that is losing jobs.

Questions on the Weekly Claims vs. the Unemployment Rate

A question keeps popping up in emails: "How can we lose 400,000+ jobs a week and yet have the unemployment rate stay flat and the monthly jobs report show gains?"

The answer is the economy is very dynamic. People change jobs all the time. Note that from 1975 forward, the number of claims was generally above 300,000 a week, yet some months the economy added well over 250,000 jobs.

Also note that the monthly published unemployment rate is from a household survey, not a survey of payroll data from businesses. That is why the monthly "establishment survey" (a sampling of actual payroll data) is not always in alignment with changes in the unemployment rate. At economic turns the discrepancy can be wide.

It may be quite some time before we weekly claims drop to 300,000 or net hiring that exceeds +250,000.

Mike "Mish" Shedlock


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Weekly Unemployment Claims at 442,000, 4-Week Moving Average drops to 453,750

Weekly Unemployment Claims at 442,000, 4-Week Moving Average drops to 453,750

Courtesy of Mish 

Please consider the Unemployment Weekly Claims Report for March 25, 2010.

In the week ending March 20, the advance figure for seasonally adjusted initial claims was 442,000, a decrease of 14,000 from the previous week’s revised figure of 456,000. The 4-week moving average was 453,750, a decrease of 11,000 from the previous week’s revised average of 464,750.

Unemployment Claims

The weekly claims numbers are volatile so it’s best to focus on the trend in the 4-week moving average.

4-Week Moving Average of Initial Claims

The 4-week moving average is still near the peak results of the last two recessions. It’s important to note those are raw number, not population adjusted. Nonetheless, the numbers do indicate broad weakness.

4-Week Moving Average of Initial Claims Since 2007

This was a good report in that claims have started to drop again, the first time since December 5, 2009. This is a step in the right direction, if it holds. On the other hand, to be consistent with an economy adding jobs, the number needs to get to the 400,000 level.

Also note that it takes 100,000+ jobs a month for unemployment to drop (barring changes in the participation rate).

At some point, employers will be as lean as they can get (and still stay in business). Yet, that does not mean businesses are about to go on a big hiring boom. Indeed, unless consumer spending picks up, they won’t.

Mike "Mish" Shedlock


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Surveys Show Job Openings, Corporate Hiring Plans Anemic

Surveys Show Job Openings, Corporate Hiring Plans Anemic

Courtesy of Mish

Businessman carrying office belongings

Inquiring minds are watching Job Opening and Labor Turnover stats for signs of life.

There were 2.5 million job openings on the last business day of October 2009, the U.S. Bureau of Labor Statistics reported today. The job openings rate was unchanged over the month at 1.9 percent. The openings rate has held relatively steady since March 2009. The hires rate (3.0 percent) and the separations rate (3.2 percent) were essentially unchanged and remained low. This release includes estimates of the number and rate of job openings, hires, and separations for the total nonfarm sector by industry and geographic region.

Job Openings

The job openings rate was unchanged in October at 1.9 percent. After falling steeply from mid-2007 through February 2009, the job openings rate has been steady at 1.8 percent or 1.9 percent since March 2009.

Hires

The hires rate was essentially unchanged in October at 3.0 percent. The rate has remained between 3.0 percent and 3.2 percent since February 2009. The hires level fell by 1.5 million from the most recent peak in July 2006 to March 2009 but has declined by only 133,000 since.

The hires rate was essentially unchanged in every industry and region in October. Over the 12 months ending in October, the hires rate (not seasonally adjusted) declined for total nonfarm and total private. The hires rate decreased over the 12 months for wholesale trade; retail trade; information; accommodation and food services; and state and local government. The rate increased for federal government.

Separations

The total separations, or turnover, rate was little changed in October and remained low at 3.2 percent. The total separations rate (not seasonally adjusted) decreased over the 12 months ending in October for total nonfarm and total private. Total separations includes quits (voluntary separations), layoffs and discharges (involuntary separations), and other separations (including retirements).

The total separations level is influenced by the relative contribution of its three components—quits, layoffs and discharges, and other separations. The percentage of total separations at the total nonfarm level attributable to the individual components has varied over time. The proportion of quits had exceeded the proportion of layoffs and discharges every month from the beginning of the series in December 2000 until November 2008 when layoffs and discharges became the


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Giving Temps A Break

But are many of these temporary hirings pre-planned to be merely temporary, e.g., retailers needing more sales people for the holiday season?

Combination thanks to Tom (But Then What) and Jake (Econompic Data). – Ilene

Temporary Help as a Predictor of Broader Hiring

Courtesy of Jake at Econompic Data

Bloomberg reported:

The worst U.S. employment slump in the post-World War II era may be about to end as companies hasten to hire temporary workers and boost hours, according to economists such as John Ryding and Zach Pandl.

Employers took on 52,000 temporary workers in November, the largest increase since October 2004 and the fourth consecutive gain, the Labor Department said today. The average workweek climbed by 12 minutes, the most since March 2003.

“It is beginning to look like December could be the first month to show a positive payroll print,” Ryding, chief economist at RDQ Economics LLC in New York, said in a telephone interview. “Companies are running out of labor.”

Jumps in temporary help and working hours often presage the addition of permanent, full-time staff as companies grow more confident sales will be sustained. Job growth would help lift consumer spending, the biggest part of the economy, and aid the recovery from the worst recession since the 1930s.

[click on graph for larger image]

This cycle may be slightly different as employers delay the full-time hiring due to uncertainty and quite frankly an ability to get top talent "on the cheap" on a temporary basis. Still, a nice sign on the margin.

Source: BLS

Giving Temps A Break

Courtesy of Tom Lindmark at But Then What

Jake has a nice post on the relationship between temporary hiring and its relationship to payrolls. Here is his graph (above).

And he comments:

This cycle may be slightly different as employers delay the full-time hiring due to uncertainty and quite frankly an ability to get top talent “on the cheap” on a temporary basis. Still, a nice sign on the margin.

No disagreement here that it is a positive sign and I agree that employers are likely to use temporary workers as a cheap way of adding employees. Should they be allowed to do that?

Right now is probably not the right time to be doing anything that


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Insider Scoop

Apache Agrees To Sell Western Canada Assets For US$374M

Courtesy of Benzinga.

Apache Corporation (NYSE, Nasdaq: APA) and its subsidiaries today announced an agreement to sell producing oil and gas assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million.

Incremental to Apache's earlier $2 billion share re-purchase announcement, the company plans to use the proceeds of this transaction to buy back Apache common shares under the 30-million-share repurchase program that was authorized by Apache's Board of Directors in 2013.

Apache is selling primarily dry gas-producing properties comprising 622,600 gross acres (328,400 net acres) in the Ojay, Noel and Wapiti areas in Alberta and British Columbia. In the Wapiti area, Apache will retain 100 percent of its working interest in horizons below the Cre...



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Chart School

What To Do With The Market’s Bounce

Courtesy of David Grandey.

Last week, we said: 

“However, both indexes are at or near MAJOR support levels. That means that we are ‘in the zone’ for a bounce of some sort in the next couple of days.”   And a bounce is exactly what we got:      
But as you can see even with last week’s bounce, we are still locked in a downtrend.   As we look ahead to next week, should we break out of the downtrend to the upside, we’ll want to take advantage of buying stocks doing the same.  And should we remain in a downtrend, we want to short stocks that are also locked in downtrends.    As we’ve said before: Success in the market comes from trading stocks in tandem with the indexes.   
  Should the markets break higher, then FF is an excellent long side candidate:       Here we have a leading stock that like the Nasdaq is in a min...

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Market Shadows

Everything Looks Clearer... in the Rear View Mirror

Everything Looks Clearer… in the Rear View Mirror

By Paul Price of Market Shadows

Brave souls who write about stocks always subject themselves to potential embarrassment if they take a stand on the future movement of their selected company. Including both a price target and a time horizon makes you accountable if things don’t go as predicted.

For that reason many media pundits much prefer to explain what’s already happened rather than sticking their necks out. They would rather justify the (supposed) reason...



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Phil's Favorites

10 Ways to Screw up Your Retirement

10 Ways to Screw up Your Retirement

By Dennis Miller

There are many creative ways to screw up your retirement. Let me show you how it’s done.

Supporting adult children. My wife Jo and I have friends with an unmarried, unemployed daughter who had a child. Our friends adopted their grandchild and are now in their late sixties raising a kid in grade school. The same daughter had a second child, and they adopted that one too. When she announced she was pregnant a third time, they finally said, “Enough! It’s time for a third-party adoption.”

Last time I spoke with them, their unemployed daughter and her boyfriend were living in their basement, neither contributing financially nor lifting a finger around the house. What began as a temp...



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Zero Hedge

Donetsk "Letter To Jews" Found To Be A Forgery

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

In the days before the Geneva "de-escalation" conference (and coincidentally, days after the secret visit of CIA director Brennan to Kiev), the top story across western media was the "undisputed" proof that east-Ukraine, populated by "terrorist separatists", is preparing to unleash a neo-nazi wave against local jews, when a leaflet was unveiled, beckoning the Jewish population to register and declare their assets.

The ...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Click here and sign in with your PSW user name and password, or sign up for a free trial.

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Option Review

Wild Ride For Chipotle

Shares in Chipotle Mexican Grill Inc. (Ticker: CMG) opened higher on Thursday morning, rising more than 6.0% to $589.00, after the restaurant operator reported better than expected first-quarter sales ahead of the opening bell. But, the stock began to falter just before lunchtime on concerns the burrito-maker will increase menu prices for the first time in three years. The price of Chipotle’s shares have since fallen into negative territory and currently trade down 3.5% on the session at $532.89 as of 1:50 p.m. ET.

Chart – Shares in Chipotle cool by lunchtime

...

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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

What the Market Wants: Positive News and Stocks at Bargain Prices

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

Last week’s market performance was nasty again, especially for the Small-cap Growth style/cap, down 4%.  Large-caps faired the best, losing only 2.7%.  That’s ugly and today’s market seemed likely to be uglier today with escalating tensions over the weekend in Ukraine. 

But once again, positive economic trumped the beating of the war drums. Retail Sales jumped up 1.1% over a projected 0.8% and last month’s tepid 0.3%, which was revised up to 0.7%.  While autos led, sales were up solidly overall.  Business inventories were about as expected with a positive tone.  Citigroup (C) handily beat estimates to add to the morning’s surprises.  As a result, the market was positive through most of the day, led by the DJI, up 0.91%, and the S&P 500, up 0.82%.  NASDAQ had a less...



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Digital Currencies

Facebook Takes Life Seriously and Moves To Create Its Own Virtual Currency, Increases UltraCoin Valuation Significantly

Courtesy of ZeroHedge. View original post here.

Submitted by Reggie Middleton.

The Financial Times reports:

[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process. 

The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...



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OpTrader

Swing trading portfolio - week of April 14th 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here...



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Promotions

See Live Demo Of This Google-Like Trade Algorithm

I just wanted to be sure you saw this.  There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.

If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.

Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.

Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!

And get this…had you done nothing b...



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Pharmboy

Here We Go Again - Pharma & Biotechs 2014

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.

And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference.  Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014?  The Biotech ETF beat the S&P by better than 3 points.

As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...



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