Economic Recovery - Jobless Recovery?

Senator's filibuster threatens highway jobs: DOT

By Aaron Smith, CNNMoney.com staff writerMarch 1, 2010: 12:01 PM ET

NEW YORK (CNNMoney.com)  Department of Transportation secretary Ray LaHood on Monday blamed a senator's filibuster for furloughing thousands of federal employees and threatening state jobs while shutting down highway construction projects nationwide.

"As American families are struggling in tough economic times, I am keenly disappointed that political games are putting a stop to important construction projects around the country," wrote LaHood, in a press release. "This means that construction workers will be sent home from job sites because federal inspectors must be furloughed."

LaHood was referring to the one-man filibuster of Sen. Jim Bunning, R-Ky., who has blocked a bill that would, among other things, provide a short-term extension of the Highway Trust Fund, which is a federal fund set up to pay for transportation projects around the country.

Bunning said he opposes the bill on a pay-as-you-go basis, not wishing to add to the nation's $5 trillion in debt.

"There are going to be other bills brought to this floor that are not going to be paid, and I'm going to object every time they do it," he said from the floor of the U.S. Senate on Friday.

A representative for Bunning was not immediately available for comment.

LaHood said that up to 2,000 employees of the U.S. DOT will be sent home without pay. He said that federal inspectors will be removed from 42 road construction sites on federal lands throughout the country, ranging from a $1.1 million clean-up project in Tongass National Forest in Alaska to a $7.2 million construction of a roundabout on St. John in the Virgin Islands. The most expensive project to be affected is the $36 million replacement of the George Washington Parkway Humpback Bridge in Virginia and Washington, D.C.

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Congress Takes Up Jobs Measures

By CARL HULSE

The fate of stalled jobs-related measures in both the House and the Senate will occupy the attention of Congress this week.

In the Senate, Democrats are scheduled to begin consideration of $31 billion in corporate tax breaks and an extension of added benefits and health insurance for the unemployed through the end of the year. At the same time, they will be trying to shake loose an interim monthlong benefits extension that is being held up by Senator Jim Bunning, Republican of Kentucky.

Across the rotunda, the House Democratic leadership will be pushing ahead with the $15 billion jobs bill passed by the Senate last week in the hopes of getting it quickly to the president’s desk despite internal Democratic reservations.

Senate Democrats say they intend to keep the pressure on Mr. Bunning and the Republican leadership to allow the short-term extension of unemployment benefits and other federal programs to move through the Senate and become law.

Jobless benefits began running out as of Sunday, with increasing numbers of Americans in danger of losing their coverage if the impasse is prolonged. As many as one million people could lose their unemployment benefits if the matter is not resolved this month.

The action by Mr. Bunning, who is insisting that the spending on the jobless pay not be added to the deficit, is also affecting other federal programs, including federal highway construction spending since the measure Mr. Bunning is impeding also extended the highway program. Some workers at the Department of Transportation may be furloughed since their salaries are paid out of the expired program.

At the same time, the Senate will begin debating on Tuesday a tax and federal aid package that includes longer extensions of the safety net programs while renewing tax breaks like the research and development tax credit that expired at the end of last year.

Senator Harry Reid of Nevada, the majority leader, said he would allow amendments on the measure but hoped to strike an agreement with Republicans to limit the time the Senate would spend on legislation that Democrats considered another element of their job-creating agenda.

Senate Democrats had been hoping for quick House approval of the $15 billion package that grants employers an exemption from payroll taxes on new workers if they have been unemployed for two months.

But the measure came under criticism from House Democrats for the way it allocated $20 billion in highway funding, for how its costs offsets were calculated, and, from liberals, for not being ambitious enough. House leaders say they believe they have addressed the criticisms and should be able to round up the votes for the measure later this week.

100,000 council jobs could go as funding from central Government is slashed

As many as 100,000 jobs could go in councils over the next three years as Government spending cuts start to bite, a leading expert has warned.

Tony Travers, a local government expert from the London School of Economics, described suggestions in the BBC survey that 25,000 jobs could go as cautious.
He said: “Nothing like this has happened for a generation. For myself I’d be amazed if it was that low. I think it’ll be much higher. It could be as high as 100,000.”

A number of councils indicated that they will cut jobs more than 1,000 posts, as funding from central Government is cut back.

Eight authorities - Kirklees, Leeds, City of Bradford, Sheffield, Stoke-on-Trent, Nottinghamshire, Lincolnshire and Surrey - said 1,000 or more posts might be lost within five years.

Birmingham City Council, which did not respond to the survey, is planning savings of £69m in the next financial year, which could mean the loss of up to 2,000 jobs.

Shropshire Council has also said it is planning to cut more than 1,000 posts over the coming years.

There are fears that key local services such as libraries, nurseries, arts and leisure services are now at serious risk. Seven in 10 councils predicted they will have to cut spending by up to 20 per cent over the next three to five years

However John Denham, the local Government secretary, refused to a put a figure on local authority spending cuts, admitting only that "things are going to be tighter" for councils.

In a bad tempered exchange on BBC Radio 4's Today programme, Mr Denham refused seven times to quantify the amount councils may have to cut spending.

He insisted that cuts in front line services would not be necessary if councils made efficiency savings elsewhere.

Mr Denham said: "We all know there are efficiencies to be made behind the scenes ... there are still large areas of duplication and inefficiency that can be dealt with.

"I am not going to put a figure on it because that will be determined by the next spending decisions."

In Newcastle, a homeless hostel said it was turning away four out of five people who asked for a bed because it did not have the funding to look after them all. Its council grant was reportedly frozen.

Nottinghamshire County Council was selling 13 care homes, using the savings to pay for supported housing for older people.

Leicestershire County Council told the BBC it was planning big cuts in grants to community groups.

A community centre in Hinckley, which has 3,000 visitors a week - ranging from pre-school children to 90-year-old lunch club members - fears it might have to close.

Library hours are being reduced at Thurrock in Essex, while nearby Southend says it will not be buying any library books this year.

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Jobs report critical after mixed economic data

By STEPHEN BERNARD

NEW YORK — Investors are seeking direction. Friday's report on employment could give them exactly what they want.

The Labor Department's monthly snapshot on employment has always been crucial for investors trying to figure out where the economy is headed. This month's report comes at a time when the market cannot figure out which direction it wants to go. Economic indicators domestically and around the globe are as murky as they've been in months.

Markets have alternated rallies and retreats in recent weeks — sometimes even within a single trading session — following fallout from European debt problems and recent reports on housing, manufacturing and consumer confidence that sent mixed signals.

On top of that, the last two weekly jobless claims reports have shown surprise jumps in people filing for unemployment for the first time. Both weeks economists had forecast declines.

The uncertainty means investors will delve deeply into the monthly employment report. Underneath headline numbers that aren't apt to improve much, traders and analysts will dissect other data from the report looking for signs that the economy is on the right path.

The report could suggest the U.S. is following Europe, where growth is almost nonexistent, or it could show that the fourth-quarter gross domestic product jump of 5.9 percent can be sustained.

"Job creation is fundamentally important," said Brett D'Arcy, chief investment officer of CBIZ Wealth Management Group. "In the end, if we create jobs, we'll have consumers with dollars in their pockets." Consumer spending accounts for about 70 percent of U.S. economic growth, making it critical to a strong recovery.

The headline numbers in Friday's report the unemployment rate and jobs added or lost  will still be important. Economists polled by Thomson Reuters project the unemployment rate rose to 9.8 percent in February from 9.7 percent a month earlier.

At the peak of the recession, employers were shedding more than 700,000 jobs a month. In February, they are expected to have cut 20,000 jobs for the second straight month.

"Job losses have slowed significantly," said Arpitha Bykere, a senior analyst at Roubini Global Economics. "A recovery now hinges on hiring."

Underemployment: In addition to those considered "unemployed," this rate factors in workers who have given up looking for work and part-time workers who would prefer to work full-time. The current rate is 16.5 percent, meaning nearly one in six people aren't working as much as they'd like.

"A tremendous number of American families, households are affected," Len Blum, a managing partner at investment bank Westwood Capital, said. He noted that the underemployment rate paints a truer picture of just how bad the job situation is in the country.

Hours worked: The average number of hours worked is one of the better leading indicators in the report, analysts say. That's because current employees can only work so many hours before new staff needs to be hired. A continued rise in average hours worked would point to job creation in the coming months.

Economists forecast hours worked rose to 33.4 hours in February from 33.3 a month earlier.

Temporary employment: This is also considered a good indicator of which direction the unemployment rate will go in a few months. With employers still unsure about the recovery's strength, they'll add temporary or part-time workers at first if they see a surge in demand.

Temp services added 52,000 jobs in January, the fourth straight monthly gain.

Analysts say employers won't add permanent jobs, because of the high costs of salaries, benefits and training, until they are sure business has returned for good.

Unemployment duration: Roubini Global Economics' Bykere said more than 30 percent of unemployed people have been out of work for at least six months and half at least three months. Those signs are troubling, she said.

The longer someone is unemployed, the harder it is for them to find a new job, especially for people who have to retrain to find work in a new profession.

Copyright © 2010 The Associated Press. All rights reserved.

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