U.S. Unemployment Down

Economic prognosticators waited for the U.S. Bureau of Labor Statistics to release its monthly unemployment numbers. It turned out that employment increased by 103,000 in December, enough to push the official unemployment rate down to 9.4 percent from 9.8 percent. A moderately good showing, but not as many new jobs as expected.

January 7, 2010
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user totalAldo

Economic prognosticators (just about everyone these days) waited for the the U.S. Bureau of Labor Statistics to release its monthly unemployment numbers. It turned out that employment increased by 103,000 in December, enough to push the official unemployment rate down to 9.4 percent from 9.8 percent. A moderately good showing, but not as many new jobs as expected.

The number of people employed part-time for economic reasons (“involuntary part-time workers,” in the government’s elegant phrasing) was essentially unchanged in December at about 8.9 million, and the number of long-term unemployed likewise was unchanged, at about 6.4 million. These two groups remain tough nuts to crack, in terms of getting them full-time jobs.

By industry, employment rose in leisure and hospitality and in health care, but was little changed in other major industries, according to the BLS. In December, average hourly earnings for all employees on private nonfarm payrolls increased by 3 cents, or 0.1 percent, to $22.78. Over the past 12 months, average hourly earnings have increased by 1.8 percent.

December Pretty Good for Retailers, But Not Great for All of Them

The holiday shopping season finished with the strongest growth in revenues for retailers since 2006, the International Council of Shopping Centers said on Thursday. The organization estimated that retail sales rose 3.8 percent for the two months of November and December, compared with the same period in 2009. A Thomson-Reuters survey of the largest 28 chains put sales growth at 3.1 percent.

Still, Wall Street analysts had slightly higher hopes the likes of Macy’s Inc., Target Corp. and Costco Wholesale Corp., all of whom saw increases, but not as much as expected, especially in December. Apparently, some shoppers bought early (in November) but not often; and others were snowed in on those critical few days after Christmas when bargain-seekers hit the malls.

A few large retailers actually saw declines in same-store sales in December, the retailer equivalent of a stocking full of coal from Santa. Gap, for instance, experienced a drop of 3 percent compared with the same period last year. On the other hand, a few others beat expectations, such as Abercrombie & Fitch Co., with a sales increase of 15 percent compared with 2009.

Bond Insurer Sues Goldman

Bond insurer ACA Financial Guaranty has filed suit against Goldman Sachs, accusing the bank of trickery when it came to investing a mortgage-backed security back in 2007. That is, deceiving it into buying into the investment, which ACA calls “worthless.” The plaintiff in the case is asking for $30 million in compensation and $90 million in punitive damages.

Only last summer, Goldman paid the SEC $550 million to settle allegations involving the same security. Among other things, the new suit alleges that Goldman said that the hedge fund Paulson was investing in it too, and would take the first loss arising from any default, when in fact Goldman knew that Paulson was betting against the security.

Wall Street turned in a mixed day, mostly down, on Thursday ahead of the jobs numbers. The Dow Jones Industrial Average lost 25.58 points, or 0.22 percent, while the S&P 500 was off 0.21 percent. The Nasdaq, however, gained 0.28 percent.