Stocks Up Despite Employment Slump
- Nov 07, 2008
All those layoffs are adding up. Adding up big. The U.S. Department of Labor has reported the details of job losses in October, which it pegged at a whopping 240,000. But that’s only October. The total number of jobs that evaporated from the U.S. economy so far in the ill-starred year 2008 is about 1.179 million. With more to come this month and next. At 6.5 percent, the nation’s unemployment rate is the highest since the tail-end of the early 1990s recession. No one industry took the brunt, with pain all around. For example, manufacturing lost 90,000 jobs; construction lost 49,000; and leisure and hospitality lost 16,000. Even retailers cut back–ahead of the holiday rush–some 38,000 jobs. Hours have been cut as well. The number of workers in part-time jobs increased by 645,000 to 6.7 million, the highest total in 15 years. Part-time employment tends to jump when employers cut full-time positions to part-time ones, or when people looking for full-time work have to settle for part time. Once the shock of the bad employment numbers wore off, investors seemed inclined to buy again. Down 929.49 points in only two days, the Dow Jones index bounced up 248.02 points today, or 2.85 percent. The S&P 500 and the Nasdaq followed suit, trending up 2.89 percent and 2.41 percent, respectively. The world will have to wait a little while longer to see who will be the new U.S. Secretary of the Treasury, arguably the most important post in the cabinet now. Barack Obama didn’t make any announcements about the matter during his first press conference as President-elect this afternoon. He did call for Congress to pass some sort of stimulus package even before he takes office, calling the current situation “the greatest economic challenge of our lifetimes.” Automakers aren’t going to get a piece of the $700 billion bailout pie, at least for now. The White House–George W. Bush is the still the occupant, lest anyone forget–has opined that the executive doesn’t have the authority to provide more help for Detroit without further action by Congress. Big Three execs have been in Washington lately, humming, “Brother Can You Spare (Billions and Billions of) Dimes?” but the old administration seems inclined to leave what to do about the auto industry implosion to the new administration. The recession is sparing no corner of the economy, not even Walt Disney Co. In a conference call yesterday, Disney CEO Robert Iger said that reservations to visit the entertainment giant’s theme park had “fallen off considerably,” and that the company’s net income was off 13 percent in its fiscal fourth quarter. Revenues from Disney’s TV and movie business were also down, despite the box-office success of High School Musical 3.