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US unemployment rate hits 4-year high at 5.7% - 51k jobs lost in July, 1.6 million over past year; employers cutting jobs, hours
Sun, 03 Aug 2008 11:31:25 -0400
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NEW YORK (CNNMoney.com) -- Employers cut jobs in July for the seventh straight month, while the unemployment rate hit a four-year high, according to a government report released Friday. The Labor Department reported a net loss of 51, 000 jobs in the month. Economists surveyed by Briefing.com had been forecasting a loss of 75, 000 jobs in the latest report.
The latest report brought job losses this year to 463, 000. The June job loss number was revised to 51, 000. The unemployment rate rose to 5.7% from a 5.5% reading in June. It was the worst reading since March 2004, and slightly worse than economists' forecast of a 5.6% rate. The rate has now jumped a full percentage point from a year ago. But the 5.7% unemployment rate tells only part of the problem facing job seekers. It doesn't include those who have become discouraged from looking for work, or those who have accepted part-time jobs when they want to be working full time. Counting the unemployed or underemployed, the rate rises to 10.3%, the first time that measure has hit double figures since November 2003.
Those who are out of work are also taking longer to find new jobs. There are now 1.7 million people out of work for six months or more, which is up 6% from a month early and is 28% above year-ago levels. Nearly one in five people counted as unemployed have now been out of work for six months or more. "It is becoming increasingly hard for Americans to find work in this economy, " Sen. Charles Schumer, D-N.Y., said in a statement. "As the construction, manufacturing, and now retail sectors are reeling from job losses, too many workers are being forced to reduce their hours and take part-time jobs just to make ends meet." Tig Gilliam, chief executive of Adecco Group North America, a unit of the world's largest employment firm, said there's few signs of a turnaround in the labor market on the horizon. "I think we're going to see more of the same for at least another quarter, and it could be the rest of the year, " he said.
The job losses also show spreading weakness in the labor market. Construction lost 22, 000 jobs as housing continued to suffer, while manufacturing employment plunged 35, 000 jobs, as automakers cut production in the face of weak sales. But the job losses were spread far beyond the battered construction and auto industries. Retailers cut 17, 000 jobs, while business and professional services lost 24, 000 positions. Problems in housing and credit markets continued to hit the job base as commercial banks, Wall Street firms and real estate firms cut more than 4, 000 between them.
But there were a number of service sector employers outside of finance and real estate that saw problems as well. Publishing lost 3, 400 jobs, due to continued problems at newspapers and magazine. Airlines also cut 900 jobs. Even with gains in health care and a narrow increase in leisure and hospitality employers, service sector companies cut a total of 30, 000 jobs. And the service sector is the broad area of the economy that provides more than 80% of the non-government jobs. Government employers added 25, 000 jobs to mitigate the losses in the private sector. But Gilliam said that's not necessarily a positive for the economy. "It's good to have the government adding jobs in the short term, but that's not an long-term solution either, " he said.
In another sign of weakness, the average hourly work week fell 0.1 hour to 33.6 hours. The average hourly wage edged up 6 cents to $18.06, bringing salaries up 3.4% over the year-ago levels. That's well below the 5% rise in overall prices paid by consumers over the 12 months ending in June, meaning that paychecks are not keeping up with costs. In terms of the impact on gross domestic product, every tenth of an hour drop in the workweek is equivalent to a loss of 300, 000 to 350, 000 jobs, Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, estimated. He cut his third- quarter growth forecast to 0.7 percent at an annual rate, less than half his prior projection of 1.5 percent.
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Images courtesy of CNN Money, AP Photo/Paul Sakuma, and EPA
Governor Schwarzenegger orders pay cuts, lay-offs of state workers; Consequences, at individual level and society as a whole?
Sat, 02 Aug 2008 09:58:29 -0400
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SACRAMENTO - On Thursday, July 31, California’s Republican Governor Schwarzenegger signed an executive order cutting the pay of up to 200, 000 state employees to the federal minimum of $6.55/hour and firing over 10, 000 part time and temporary workers until the state’s budget impasse is resolved. The order exempts public safety agencies but will have an immediate effect everywhere else: Hiring, overtime and contracting will be halted, and tens of thousands of employees will feel the squeeze. It covers 22, 000 retired state employees who work under contract, temporary and part-time workers such as those who fill in at the Department of Motor Vehicles, seasonal employees and student assistants. The order affects the approximately 10, 000 state employees in San Diego and Riverside counties. They work at Department of Motor Vehicles offices, highway offices, state parks and beaches, unemployment offices, fish hatcheries and agriculture inspection stations.
The state controller, who cuts the checks, has said he will not comply with it. State Controller John Chiang, a Democrat, sent a letter to Schwarzenegger on Thursday saying he will defy the order and issue employees their regular paychecks. He said the governor's executive order was based on "faulty legal and factual premises."
Controller John Chiang challenges the governor’s claim of legal authority in ordering the cut, and warns the move will cause payroll problems for months after a budget is finalized. Speaking to 100 union members outside the Ronald Reagan State Office Building in Los Angeles, Chiang called them "innocent victims of a political struggle." "The state of California, the elected leadership, cannot put the important public servants of California in harm's way, " he said. "We put people first, we make sure we protect their interests, and that's why I have to tell the governor, with all due respect, I am not going to comply with this order." Even if he wanted to comply, Chiang said, it would take 10 months to configure the agency's outdated computer systems to do what the governor is asking.
The Democratic controller and the Republican administration also differ over the state's financial condition. Chiang maintains that California has enough money to meet all its expenses through September. If it's later determined that California has insufficient money, Chiang said he is authorized to borrow until a budget is approved. Chiang's refusal to comply sets up a potential legal skirmish between his office and Schwarzenegger's. If the administration decides to sue, Chiang said it would be a waste of taxpayer dollars.
Democratic and Republican lawmakers remain divided over how to close a $15.2 billion deficit, with Democrats favoring $8.2 billion in new taxes on corporations and the state's wealthiest residents. Republicans want a spending cap and oppose tax increases. Adding to the fiscal mess has been an unprecedented number of wildfires this year, costing the state far more for emergency response than it had budgeted.
State Treasurer Bill Lockyer this morning criticized Gov. Arnold Schwarzenegger's plan to cut state worker pay via executive order on Thursday. He listed four reasons that the plan is a bad idea: "legal challenges, logistical challenges, bad management, and no political punch".
The workers, members of Service Employees International Union Local 1000, were dressed in purple and chanted in protest against the governor's move. "People are going to get put out of their homes, " said Debra Martin, a union steward. The group is filing a lawsuit to fight the governor's executive order. Derek Pettersen, 21, a student who was working full time this summer for the Commission on Teacher Credentialing in Sacramento, was told not to show up Thursday. "It's not my fault that the budget hasn't been signed yet, and I'm the one paying for it, " said Pettersen, who will forgo $1, 600 if he remains unemployed for all of August. "I don't really understand why I had to lose my job temporarily because someone else isn't doing their job."
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Photos courtesy of Al Seib/LA Times, AP /Rich Pedroncelli, and California State Controller's Office
Original Source: North County Times, LA Times
Total solar eclipse seen in Russia, China: Sun and Moon put on show, draw millions of sky-watchers across Asia and worldwide
Fri, 01 Aug 2008 22:06:18 -0400
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The new Moon drew its shadow across Earth's Eastern Hemisphere earlier today, totally eclipsing the Sun along a track that crossed the Arctic, Siberia, and interior China. Thousands of eclipse chasers had stationed themselves along the path in anticipation. The Moon's shadow arced over the Earth as the lunar body passed directly between our planet and its star. In all, the path of darkness covered about 10, 200km (6, 300 miles). Russia saw the longest full eclipse, for two minutes, 27 seconds, at 1021 GMT - but the UK and most of Europe experienced just a partial eclipse.
"Totality" began at sunrise at 0921 GMT in Queen Maud Gulf off Victoria Island in the territory of Nunavut, Canada. The instant of greatest eclipse occurred at 1021 GMT close to the Russian city of Nadym, before totality came to an end at 1121 GMT near the Chinese city of Xi'an, in Shaanxi province.
Tourists and amateur and professional astronomers flocked to towns in the best viewing locations along the path of totality. In Novosibirsk, Siberia's cultural and scientific capital, more than 5, 000 foreign tourists were expected to show up in the city. China experienced the eclipse just a week before the opening ceremony of Beijing's Olympic Games. Chinese TV was due to broadcast the eclipse live, with crowds of people gathered along the Silk Road, a fabled trading route through the country's western deserts. Eclipses were once viewed as unlucky events in China, but the country's media had rebranded the event as "the Olympic eclipse", reports said, hoping for good fortune ahead of the sporting jamboree.
The eclipse allowed astronomers a glimpse of the Sun's corona - its outer atmosphere of super-heated gases. The area is usually impossible to see because of the bright light of the Sun, but is visible during a total eclipse as the Sun's light is obscured. Total solar eclipses usually take place about once every 18 months, and always at new Moon - when the lunar body sits directly between the Sun and the Earth. However, they do not happen every new Moon. The lunar orbit is slightly tilted to that of our planet and therefore the Moon's shadow often misses the Earth.
The world's next total eclipse of the Sun comes less than a year from now, on July 22, 2009. It will begin at sunrise in India, cross parts of Nepal, Bangladesh, Bhutan, Burma, and thickly inhabited areas of China, and will end at sunset over the South Pacific. The next total solar eclipse for North America comes on August 21, 2017. The path of totality will sweep from Oregon to South Carolina.
The Moon's shadow has two parts: an umbra and a penumbra. The umbra is the "inner" part of the Moon's shadow, and people inside this zone will witness the full glory of the eclipse. The penumbra is the Moon's faint "outer" shadow. It will only give surface viewers a partial eclipse.
In London, where the Moon's disc took its biggest bite out of the Sun at 1016 BST (0916 GMT), a maximum of 12% of the star was blotted out. Conditions were better further north. In Lerwick in the Shetland Isles, the Moon obscured as much as 36% of the Sun.
Astronomical groups reminded the public that viewing the Sun without protective equipment - even in partial eclipse phases - could result in a retinal burn and permanent eye damage. Viewing the Sun's harsh light should only be done through proper solar telescopes or glasses, or through a pinhole projection system.
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Photos courtesy of Joe Rao, EPA/Toms Kalnins and John Sun
Original Source: BBC News (with videos) and Sky & Telescope
Related Article: Solar Eclipse Wows Airborne Skywatchers Over Arctic Circle
Image Gallery: In photos: 'Solar Eclipse Around the World'
Can Cuil woo you from Google? New search engine launched on Monday to a rocky start, shows promise, needs work
Thu, 31 Jul 2008 11:05:07 -0400
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Boasting big plans, startup search engine Cuil (pronounced "cool") launched on Monday. The Cuil in the name is pronounced "Cool, " and derives from an old Irish word for knowledge. Tom Costello, a co-founder and the CEO of the company, is from Dorgheda, Ireland. The company sold itself on having indexed more pages than Google, ranking based on context rather than on popularity, and displaying results organized by concept within a beautiful user interface. There was just one problem: when the search engine launched, it didn't work very well. Cuil's site was down intermittently throughout the day on Monday, and even when the site was up, it sometimes returned no results for common queries, or failed to produce the most relevant or up-to-date results. For example, as of Wednesday morning, searching Cuil for its own name returns nothing on the first results page that is related to the engine itself, in spite of the buckets of press it got this week.
"I've seen these sorts of things for all sorts of startups that get launched, " says search-engine expert Danny Sullivan, who runs Search Engine Land. "You have issues with how it's displaying results; you have spam showing; you have a lot of duplicate results." But Cuil wasn't supposed to suffer from the common problems that all sorts of startups encounter. Its founders have impressive credentials: Anna Patterson and Russell Power both had major roles in building Google's large search index, and Tom Costello researched search architecture and relevance methods for Stanford University and IBM. On top of the company's talent, Cuil raised a reported $33 million in venture capital. "In many ways, Cuil was the exception, " Sullivan says. "They were one of the few people or companies out there where you would say, 'Well, all right, I'd be dubious about anyone else, but if anyone's going to have a chance, you should have a chance.' But they didn't deliver, and I think that makes it even harder now for startups to come along."
One of Cuil's main selling points is the size of its index. Claiming to have indexed 120 billion Web pages, which it states is three times more than any other search engine, the company says, "Size matters because many people use the Internet to find information that is of interest to them, even if it's not popular." But Sullivan notes that relevance may be the most important quality of search. "When you come into the idea of size, that starts getting into the question of obscure search, " he says. "The needle-in-the-haystack search sounds so very compelling--the idea that if you don't have a lot of pages, you can't search through the entire haystack. But, as Cuil has demonstrated very well, it doesn't help you to look through the entire haystack if it gets dumped on your head, and all you can see is a bunch of hay out there."
Investor Azeem Azhar, who incubated the startup search engine True Knowledge, notes that while it's useful to have a large base of knowledge, sometimes the sample that's selected matters more. "There are certain things that people expect to have, and there are certain facts that are more useful than others, " he says. True Knowledge, which aims at the subset of searchers who are looking for answers to direct questions, is currently working on building up a database of relevant facts that can be used to answer questions such as, "Who was president when Barack Obama was a teenager?" The company hopes that by focusing on facts of broad interest, such as those relating to famous people and places, it will be useful to people even as it solicits responses for them by way of rounding out its database. When a user asks a question that the system can't answer, it returns, "If there are any answers, I couldn't find any"; invites the user to add to the database; and points to traditional search results.
Azhar also notes that it's hard to approach many common search problems directly. For example, while many companies are trying to improve search by parsing documents using natural-language processing or, like Cuil, analyzing them for context, True Knowledge is building a database containing facts and their relations to each other. "It's a testament to how difficult it is to improve automatic understanding of documents that we said we can build a database of 700 million facts more easily, " he says.
According to numbers from comScore Inc., Google has 62 percent of the U.S. search-engine market, followed by Yahoo with 21 percent. True Knowledge, which is still in a private experimental release, has no plans to go head to head against the majors. Azhar says that the company may eventually try to sell its services to existing portals as a feature that could enrich traditional search results.
That may be the safer approach. Positioning yourself as an alternative to Google, or, for that matter, to Microsoft's and Yahoo's search engines, is highly unlikely to be a viable strategy at this point, Sullivan says. "[Startups can] really underestimate the amount of work that's involved with the incredible task of trying to compete with Google." Instead, he adds, startup search engines might do better to present themselves as supplementing what the existing major search engines offer, or as providing good results for particular types of content.
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Photos courtesy of Technology Review, ChattahBox, DailyTech
Original Source: Technology Review and Winston-Salem Journal
City council of LA bans new fast-food restaurants in poor neighborhoods with high obesity rates, encourages healthier eateries
Wed, 30 Jul 2008 18:20:12 -0400
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The Los Angeles City Council has approved a law that bans fast-food restaurants from opening in South LA. People who live in this area have the largest obesity problems. Approximately one in 3 children from South LA is obese, compared to one in five in the rest of the city. Nearly one-third of residents in the city's south are obese, compared with 19% for the overall Los Angeles area and 14% in the wealthier west side area.
The main thing responsible for this condition is poverty, as well as the fact that 73 percent of the restaurants in the southern part of the city are fast-food ones and offer meals that are high in calories and cholesterol. "There's one set of food for one part of the city, another set of food for another part of the city, and it's very stratified that way, " Marqueece Harris-Dawson, a community leader in south Los Angeles, told the Washington Post this month.
The new law will ban the opening of any fast-food restaurants for a year, but there is the possibility that this period will be increased to two years. According to the new law, “any establishment which dispenses food for consumption on or off the premises, and which has the following characteristics: a limited menu, items prepared in advance or prepared or heated quickly, no table orders and food served in disposable wrapping or containers" is considered to be a fast-food restaurant.
As expected, the new law was received with criticism by fast-food companies, who argued that many of them offer healthy food too, and that it is the consumer's decision to buy junk food. According to them, banning fast-food restaurants is an unfair decision. However, studies have shown that increasing the number of places where people can buy healthy food in a certain area reduces or at least stabilizes the number of people that suffer from obesity in that area as well.
Fast-food chains such as McDonalds have become ubiquitous in America's poor urban areas thanks in large part to their inexpensive meals, raising questions in Los Angeles about whether the new ban would hit low-income residents in the pocketbook. But the city carved out an exemption for lower-priced chains that make their food fresh to order without using a drive-through window, such as Subway. The new law that was approved by the LA City Council also encourages groceries and restaurants that offer healthy food to open for business in South LA.
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Photos courtesy of EontarioNow, AP Photo / Nick Ut, and vivirlatino.com
Original Source: eFluxMedia and Guardian, UK
Impact of Iraq War: US national deficit zooming to new record of half trillion for fiscal year 2009, could worsen as costs mount
Tue, 29 Jul 2008 11:10:03 -0400
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WASHINGTON - The White House predicted yesterday that President Bush would leave a record $482 billion deficit to his successor, a sobering turnabout in the nation's fiscal condition from 2001, when Bush took office after three consecutive years of budget surpluses.
The worst may be yet to come. The deficit announced by Jim Nussle, the White House budget director, does not reflect the full cost of military operations in Iraq and Afghanistan, the potential $50 billion cost of another economic stimulus package, or the possibility of steeper losses in tax revenues if individual income or corporate profits decline.
The new deficit numbers also do not account for any drains on the national treasury that might result from further declines in the housing market. The White House forecast was prepared before passage of the huge housing assistance package that Bush has promised to sign. That legislation would put taxpayer money at risk in numerous ways, especially if housing prices continue to decline.
Next year's record figure includes only $70 billion for the wars in Iraq and Afghanistan, which could cost three times that much, and it is based on economic assumptions that could prove unrealistic. The White House is assuming economic growth next year of 2.2 percent, down sharply from the 3 percent estimate of February but still brighter than the 1.7 percent growth estimate of many private-sector economists. The White House is also assuming rosier numbers for inflation and unemployment rates. "That's not the real number, " former Bush Treasury secretary Paul H. O'Neill said of the $482 billion deficit forecast. "It's upward of $500 billion and counting. It's a mind-boggling number."
Nussle predicted yesterday that the deficit would more than double in the current fiscal year - to $389 billion, from $162 billion in 2007 - before shooting up to $482 billion in fiscal 2009, which begins in about two months. "We are not happy about the deficit, " Nussle conceded.
The deficit projected for 2009 would be the largest in absolute terms, easily surpassing the record of $413 billion in 2004. The White House and many economists prefer to measure the deficit as a share of the economy. Measured against the size of the economy, next year's mark is still eclipsed by the deficits of Bush's first term, as well as the deficits of George H.W. Bush and Ronald Reagan. The projected 2009 deficit would be 3.3 percent of the economy. That is the largest share since 2004, but well below the percentages recorded in the 1980s and early 1990s. In 1983, the deficit was 6 percent of the overall economy.
The new estimate of the 2009 deficit was $74 billion higher than Bush and Nussle had predicted in the president's budget six months ago. Bush had expected the impact of the tax rebates and war funding to begin subsiding in 2009, reducing the deficit by $3 billion. Instead, Nussle said, the slowing economy will push the deficit to a level that would easily beat the record $413 billion deficit of fiscal 2004.
The bleak outlook for the budget will crimp the ability of the next president to carry out ambitious spending plans. And it adds to fiscal pressures that were already building because of the growth of Medicare and Social Security.
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Photos courtesy of Brendan Smialowksi / Bloomberg News, AFP, Stuff.co.nz
Original Source: Boston Globe and Washington Post
253 million regular Internet users and counting: China now has the world's largest net-using population, surpassing the US
Mon, 28 Jul 2008 15:36:58 -0400
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China now has the world's largest net-using population, say official figures. The news comes from the China Internet Network Information Center (CNNIC), which stated that 253 million Chinese went online by the end of June of this year. The total represents a 56.2% year-on-year growth - up by 91 million from June of last year, and up 43 million from December. The figure is higher than the 223 million that the US mustered in June, according to Nielsen Online.
Net penetration in the US stands at 71% compared to 19% in China suggesting it will eventually vastly outstrip the US. The development is significant because the US has had the largest net-using population since records of how many people were online started to be kept.
"This is the first time the number has drastically surpassed the United States, becoming the world's number one, " said a statement from the CNNIC, the nation's official net monitoring body.
The 2008 figure is up 56% in a year, said CNNIC. Analysts expect the total to grow by about 18% per annum and hit 490 million by 2012.
About 95% of those going online connect via high-speed links. Take up of broadband has been boosted by deals offered by China's fixed line phone firms as they fight to win customers away from mobile operators. China's mobile phone-using population stands at about 500 million people.
Despite having a greater number of people online, China's net economy still has a long way to go to match or exceed that of the US or even that of South Korea.
Breaking it down further, 214 million of those on the Internet in China accessed via a broadband Internet connection.
The percentage of the population in China on the Internet now stands at 19%, still way below that of the United States, at 71%.
Comparing this to previous numbers, just in 2006 alone, there were 137 million Internet users in China. This shows that the number of people in the Internet in the country continues to grow at a rapid pace.
People under the age of 30 in China make up 69% of the total Internet users.
Figures from Analysys International said China's net firms reported total revenues of $5.9bn in 2007. By contrast net advertising revenue alone for US firms in 2007 stood at $21.2bn.
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Photos courtesy of dBTechno, AP Photo/Eugene Hoshiko, and DanWei.org
Personal Plane flies, folds, tows, swims, and beats SUVs on mileage - ICON A5 amphibious sportsplane completes first test flight
Sun, 27 Jul 2008 12:32:15 -0400
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We never did get the hovercrafts we were promised as kids, but we're getting closer. Imagine sailing above the Bourne Bridge on your way to the beach, while consuming less gas than the SUVs stuck beneath you in traffic.
A compact, two-seat plane with folding wings that can be pulled behind a car on a trailer will premiere at an air show in Wisconsin next week in a development that heralds a new genre of flying machines designed to bring the power-boating experience to the sky. Developed by two Stanford business school graduates, Kirk Hawkins and Steen Strand, the ICON A5 is the latest and arguably coolest plane to take to the skies under a new classification that the Federal Aviation Administration calls light-sport aircraft.
The A5's top speed is 120 miles per hour, and its maximum altitude is about 10, 000 feet, in keeping with its Light-Sport Aircraft classification - a new class created to make personal aviation accessible to more people. It runs on auto gasoline and gets 18 to 20 miles to the gallon, according to Icon.
Ranging from $60, 000 for a build-it-yourself kit, to $140, 000 for the innovative ICON A5, these two-seat planes let anyone with a valid state driver's license and 20 hours of flying instruction make short flights for travel or pleasure, said Dick Knapinski, spokesman for the air show in Oshkosh, Wis., where the new plane will spread its wings. "This is something new and cutting edge, an aircraft whose wings fold so you can put it on a trailer like a boat or a jet ski, " said Knapinski, spokesman for the Experimental Aircraft Association, host for the Wisconsin fly-fest.
ICON Aircraft, the company behind the new plane, was conceived at Stanford in 2005 when Hawkins, a former pilot in the Air Force and for an airline, met Strand, a product designer for IDEO and other Silicon Valley companies. ICON spokeswoman Jennie Bragalone said Hawkins realized that the new FAA licensing and aircraft rules created a niche for an aircraft that was both sexy and space-saving because it could be stored and towed like a boat. "He wants to make flying the next power sport, " she said.
ICON, now based in Los Angeles, aims to take its single-plane prototype into volume production with private backing from entrepreneurs like John Dorton, chief executive of Mastercraft Boats and tech maven Esther Dyson. But the Stanford-spawned craft will have to get up to speed fast to compete with European imports, according to a bird's-eye view of the light-sport aircraft market from Chris Dancy, with the 415, 000-member Aircraft Owners and Pilots Association. Dancy said that when the FAA minted this new sport-plane category in July 2004, firms from the Czech Republic, Italy and Germany flew right into the U.S. market because - space being more precious in Europe - plane-builders there were already turning out craft below the FAA's 1, 430-pound weight limit.
It's still early days for this new category. Dancy said about 2, 000 sport-plane licenses have been issued so far, compared with more than 200, 000 licenses for private planes, which require 40 hours of training and a physical exam. Other U.S. brands include American Legend Aircraft, Aircraft Manufacturing and Development, Cub Crafters and Cessna, he said.
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Photos courtesy of ICON Aircraft
Original Source: SF Chronicle and Boston Globe
Related Article (with video and press photos): ICON Aircraft Successfully Flies ICON A5 Sport Plane Prototype - First test flight completes major milestone
Official Site: ICON Aircraft
US Stocks bounce back on latest economic readings - factory orders, new homes sales top forecasts, oil prices continue to fall
Sat, 26 Jul 2008 18:58:53 -0400
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Wall Street ended a volatile week with a moderate rebound Friday after better-than- expected economic data at least temporarily eased the worries of investors concerned about housing and the financial sector. Financials fell again on continued worries about the health of balance sheets, while technology stocks advanced. A day after a sharp drop in existing-home sales aided in pushing stocks sharply lower, economic news helped buoy the market on Friday.
The Commerce Department reported that factory orders for big-ticket manufactured goods, such as cars, appliances and machinery, rose by 0.8 percent in June, the strongest gain in four months and well ahead of Wall Street's expectations. But outside demand for defense equipment, orders would have been up only 0.1 percent. Another Commerce Department report showed that new-home sales dropped by a smaller-than-expected 0.6 percent to a seasonally adjusted annual rate of 530, 000 units; the market expected sales to total 505, 000. Although it marked the seventh decline in the past eight months, it stirred some hope that the housing market could be finding a bottom. Orders for durable goods rose 0.8% last month, far better than the 0.4% decline expected.
And there was good news about consumers, whose spending accounts for more than two-thirds of U.S. economic activity. The Reuters/University of Michigan index of consumer sentiment for the first part of July came in at 61.2, while economists forecast a reading of 56.4. The reading was a slight rebound from a 28-year-low last month. "This is a market that's looking for any good signs, " said John Massey, a fund manager at AIG SunAmerica Asset Management. "People are trying to find the light at the end of the tunnel."
Some experts said, however, that trading is likely to be uneven in the coming days as Wall Street awaits Friday's July employment report. Linda Duessel, equity market strategist at Federated Investors, said economic figures such as the durable-goods numbers are important because they reveal continued demand from abroad, which could help U.S. companies continue to rake in profits even if the U.S. economy isn't running at full steam. "That's good news for market participants as we try to find a footing in the market because we really don't want to see our weakness leak outside the U.S., " she said.
The Dow Jones industrial average rose 21.41 points Friday, to 11, 370.69, rebounding slightly from Thursday's decline of more than 280 points. Broader stock indicators also rose. The Standard & Poor's 500 index advanced 5.22, to 1257.76, and the technology-heavy Nasdaq composite index jumped 30.42, to 2310.53. For the week, the Dow fell 1.1 percent and the S&P 500 lost 0.2 percent. Friday's tech rally left the Nasdaq up 1.2 percent for the week. Oil fell $2.23 to settle at $123.26 a barrel. Crude prices have fallen more than $20 in recent weeks, alleviating some of Wall Street's concerns about the impact of inflation on consumers' ability to spend.
The stock market's volatility during the week—rallying Tuesday and Wednesday only to erase those gains Thursday—illustrates tentativeness behind some of the bets investors are making, said Hugh Johnson, chairman and chief investment officer of Johnson Illington Advisors. He said the market tends to react to the latest headlines. "It's just news sensitive, and the real question is, 'What's the next news going to be? Good or bad?' That means that the market doesn't have a trend or a direction. It depends entirely on whether the news is going to be good or bad on any given day and that doesn't give you, as an investor, a lot of confidence."
For the second consecutive session, financial-services stocks were hard hit, with Dow components Bank of America losing 3.5 percent and Citigroup falling more than 1 percent. For the year, each is down more than 28 percent.
Europe gains: European stocks posted their first back-to-back weekly gains since May as better-than-estimated earnings and lower oil prices fueled a rally in carmakers, and banks climbed on speculation credit-market losses will abate. Europe's Dow Jones Stoxx 600 Index increased 0.4 percent this week, extending its rebound from a three-year low on July 15 to 5.7 percent.
Asia falls: In Asia, stocks fell the most in six weeks, snapping a four-day rally. The MSCI Asia-Pacific index lost 2.8 percent. The index rallied 5.9 percent in the first four days of this week as concerns eased that bank losses will expand and oil tumbled.
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Photos courtesy of AFP, AP Photo/Ed Ou & Bebeto Matthews, and Independent.ie
Original Source: Chicago Tribune and NY Daily News
Ten years after it was introduced, France bids au revoir to the compulsory 35-hour work week as part of economic reforms
Fri, 25 Jul 2008 13:56:23 -0400
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PARIS: Ten years after it was introduced, France has ended the compulsory 35 hour work week. Legislators in France have voted to allow companies to sidestep the 35-hour workweek by negotiating individual overtime agreements with their employees. The new legislation, which was passed by Parliament late Wednesday night and which will take effect in September, is the boldest step yet in stripping what many view as an emblematic labor law, without quite getting rid of it. While the workweek limit is as good as buried, every hour beyond 35 that is worked will be considered overtime and will therefore be more expensive.
Labour Minister Xavier Bertrand denied that people would have more working hours imposing on them and said now "everything will be negotiated company by company." Under the new legislation no one in France can work more than 48 hours in a given week, including overtime. Right now, despite the current law, many French employees work longer than 35 hours a week but accumulate time off or overtime. They actually average 41 hours, compared with 41.7 in Germany, 43.1 in Britain, 41.3 in Italy and the EU average is 41.9. In terms of paid annual leave, the French are in the mid-range in Europe with 25 days holiday as guaranteed non-working days.
The new legislation opens the way for company-specific negotiated agreements between employers and labor unions about the number of hours a week and days a year an employee works. The new limits are more generous than before: For manual workers who are paid by the hour, the weekly maximum limit rises to 48 hours, in line with European Union legislation. For white-collar staff members, paid by the day, the annual maximum of days they can be asked to work will rise to 235 days from 218. Also up for negotiation is the amount of time an employee gets in compensation for the extra hours worked, as opposed to being paid for the overtime.
The new changes are likely to affect small and medium-sized businesses most. Many large companies benefited from the additional flexibility that the 35-hour week provided by allowing them to annualize work time, making staff members work more in high season and less in low season without having to pay costly overtime. Blue-collar workers have periodically complained that this practice ended up reducing their income.
But most employees, and particularly those with comfortable incomes and a preference for additional time off, have grown attached to the shorter workweek. Professionals, whose salaries are calculated on a daily basis rather than hourly, fear that they will lose a dozen extra holidays a year that they had enjoyed in compensation for working more than the legal 35 hours a week. Their dismay at the changes was on display Wednesday afternoon when hundreds protested outside the Senate building, sporting banners with slogans like "There is life after work." And the union that represents white-collar employees and management staff, CFE-CGC, published an open letter in French newspapers complaining about the changes.
The new legislation also includes rules to make labor unions more representative. Any union participating in negotiations on work time needs to have obtained at least 10 percent of the vote in company elections. But any union representing 30 percent or more of the internal vote is allowed to sign a binding agreement with management.
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Photos courtesy of The Economist, Reuters/Charles Platiau, and AFP
Original Source: euronews and International Herald Tribune
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