talk about try to put a spin on it ...her's the article ..
By Shobhana Chandra
June 5 (Bloomberg) -- The U.S. lost fewer jobs than forecast in May, reinforcing signs that the deepest recession in half a century is starting to abate.
Payrolls fell by 345,000, the least in eight months, after a revised 504,000 loss in April, the Labor Department said today in Washington. The jobless rate increased to 9.4 percent, the highest since 1983, in part as more people joined the labor force to look for work.
A deceleration in firings, combined with stabilization in housing and manufacturing, signal the economic slump is easing. Still, Americans are spending less and saving more as home values fall and companies from American Express Co. to General Motors Corp. pare jobs, meaning any expansion may be muted.
“We’re far, far away from the depths of the recession we were in,” Stephen Stanley, chief U.S. economist at RBS Greenwich Capital Inc. in Greenwich, Connecticut, said before the report. “It’s one of the first steps toward a recovery.” Still, he said, “income growth will be tough to come by as long as the unemployment rate is rising.”
Revisions added 82,000 from payroll figures previously reported for April and March.
Equity-index futures surged, with contracts on the Standard & Poor’s 500 Stock Index rising 1.5 percent to 954.60 at 8:34 a.m. in New York. Treasuries sank, sending yields on benchmark 10-year notes to 3.88 percent from 3.70 percent late yesterday.
Economists’ Forecasts
Payrolls were forecast to drop 520,000 after a 539,000 decrease initially reported for April, according to the median of 76 economists surveyed by Bloomberg News. Estimates ranged from declines of 450,000 to 600,000. Job losses peaked at 741,000 in January, the most since 1949.
The jobless rate was projected to jump to 9.2 percent, with forecasts ranging from 9 percent to 9.4 percent.
Markets are healing even as the economy is still struggling. The Standard & Poor’s 500 index is up 39 percent since reaching a 12-year low on March 9.
The world’s largest economy has lost 6 million jobs since the recession began in December 2007, exacerbating the biggest drop in any post-World War II economic slump.
The U.S. may suffer additional “sizable” job losses, Federal Reserve Chairman Ben S. Bernanke said this week in testimony to lawmakers. While economic growth will return “later this year,” he said, unemployment will rise “into next year.”
Factory Jobs
Today’s report showed factory payrolls fell by 156,000 after decreasing 154,000 in the prior month. Economists forecast a drop of 150,000. The decline included a drop of 29,800 jobs in auto manufacturing and parts industries.
The bankruptcies of General Motors and Chrysler LLC may generate more job losses in coming months. AutoNation Inc., the largest U.S. new-vehicle retailer, plans to close seven showrooms, while Visteon Corp., the former parts-making unit of Ford Motor Co., and chassis manufacturer Metaldyne Corp. also filed for bankruptcy.
“The big declines in employment are behind us, but the auto numbers are going to be playing havoc with the data for months,” said Tim Quinlan, an economist at Wachovia Corp. in Charlotte, North Carolina. “The bottom line is that, while we are seeing improvement, it’s still not a pretty job market.”
Construction, Finance
Payrolls at builders fell 59,000 after decreasing 108,000. Financial firms cut payrolls by 30,000, after a 45,000 drop the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 120,000 workers after reducing 230,000. Retail payrolls decreased by 17,500 after a 36,500 reduction.
Government payrolls declined by 7,000 after rising 92,000 the prior month.
Some companies are looking to grow. Wal-Mart Stores Inc., the largest U.S. private employer, yesterday said it plans to add more than 22,000 jobs. The Bentonville, Arkansas-based retailer will hire store managers, pharmacists, cashiers and others for the 142 to 157 outlets it may open or expand in the 12 months through Jan. 31.
Rising unemployment and record wealth destruction mean consumer spending may not sustain the gains reported in the first quarter. Purchases fell in April as Americans boosted the savings rate to a 14-year high. Department stores Macy’s Inc. and Dillard’s Inc. and luxury chain Saks Inc. yesterday reported steeper-than-forecast sales declines for May.
‘Weak’ Retailing
Stores are bracing for “a weak retail environment,” said Eric Wiseman, chief executive officer of VF Corp., the world’s largest clothing maker. Greensboro, North Carolina-based VF, which makes Wrangler jeans and JanSport backpacks, will trim inventories as it expects shipments to fall this year.
“Fear drives conservatism in consumer spending, and the biggest fear now is about losing jobs,” Wiseman said in an interview in May.
American Express, the largest U.S. credit-card company by purchases, will cut 4,000 positions as cardholders squeezed by job losses fail to pay debts.
Among other recent announcements, Continental Airlines Inc., the fourth-largest U.S. carrier, said it will drop about 500 jobs; KeyCorp, the second-largest Ohio-based bank, plans to eliminate more than 300 positions this quarter; and Lockheed Martin Corp., the world’s largest defense company, will cut 130 workers.
Today’s report also showed the average work week shrank to 33.1 hours from 33.2 hours in April. Average weekly hours worked by production workers slipped to 39.3 hours from 39.5 hours, while overtime held at 2.7 hours for a second month. That brought the average weekly earnings down to $613.67 from $614.86.
Workers’ average hourly wages rose 2 cents, or 0.1 percent, to $18.54 from the prior month. Hourly earnings were 3.1 percent higher than May 2008, the smallest gain since November 2005. The gain in both measures matched economists’ forecasts.
To contact the reporter on this story: Shobhana Chandra in Washington [email protected] Last Updated: June 5, 2009 08:39 EDT
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