Employment Pic No Worse
- Mar 08, 2010
March 8, 2010
By Dees Stribling, Contributing Editor
About 36,000 employees were shown the door in February, according to the Bureau of Labor Statistics on Friday, but it wasn’t enough to budge the official unemployment rate of 9.7 percent. Moreover, it was fewer job losses than expected.
Despite the effects of snow in the Northeast last month, a few employment segments actually added jobs in February. The number of temporary workers was up by 48,000, which may be a leading indicator of more full-time employment to come. Also, factories added 1,000 jobs during the month.
On the other hand, builders lost a net of 64,000 employees and financial firms lost 10,000. The rate of underemployment–part-timers looking for full-time work and people who have stopped looking for work–was 16.8 percent last month, according to the bureau.
Rep. Frank Scolds Banks Over Home Equity Loans
U.S. Rep. Barney Frank is pushing home-equity and second-lien lenders to quit their iron grip on some of these loans, the better to expedite first-mortgage modifications and short sales. In an open letter last week to the biggest panjandrums in the banking industry–the heads of Citigroup Inc., Bank of America Corp., JP Morgan Chase & Co. and Wells Fargo and Co.–the chairman of the House Financial Services Committee took them to task for over the issue.
“Many investors in first-lien mortgages have indicated that they are willing to accept… significant losses on those investments in order to move on and use their money for other purposes…” the letter noted. “According to investors, Administrative officials and other experts I have consulted, holders of second-lien mortgages are now a principal obstacle to many modifications.”
Knock it off already, the chairmen then said (politely, but with “or else” implied). “I urge you in the strongest possible terms to take immediate steps to write down these second mortgages and allow principal reduction modifications of the underlying first liens to take place.”
Consumer Credit Still on Downward Path
According to the Federal Reserve’s monthly report on the subject, consumer credit increased for the first time in a year in January 2010, up 2.4 percent (to 2.46 trillion). The increase didn’t involved credit-card borrowing, however, which was down. Mostly people are borrowing more for cars and going to school.
In fact, consumers shed about $2 billion in credit card debt in January–$866.1 billion in December to $864.4 billion, a fairly modest drop, but still a drop. It was the 16th month in a row that U.S. credit-card debt has gone down.
Since September 2008, when the economic fubar got under way in earnest, about $111 billion in credit card debt has evaporated. Much of that was consumers paying down their cards, as a reflection of nervous times. But some of the total was bad debt written off permanently by card issuers.
Wall Street advanced into positive territory on Friday, perhaps glad that unemployment was no worse, with the Dow Jones Industrial Average up 122.06 points, or 1.17 percent. The S&P 500 gained 1.4 percent and the Nasdaq advanced 1.48 percent.