Friday, June 03, 2011

Urgent: In surprise, jobless rate up as employers add only 54,000 jobs in May, far below forecasts

From a just-moved Wall Street Journal story that bodes poorly for virtually all U.S. companies:

U.S. hiring slowed dramatically in May and the unemployment rate kept rising, adding to concerns the jobs market will take years to heal as the economy remains weak.

Nonfarm payrolls rose by 54,000 last month as the private sector posted the smallest jobs gain in nearly a year, the Labor Department said this morning in its survey of employers. Payrolls data for the previous two months were revised down by a total 39,000 to show increases of 232,000 jobs in April and 194,000 in March.

The jobless rate, which is obtained from a separate household survey, unexpectedly rose to 9.1% in May from 9.0% in April. There are almost 13.9 million Americans who would like to work but can't get a job.

Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 160,000 and the jobless rate would edge lower to 8.9%.

The WSJ's story is likely behind a paywall. Here's the Associated Press' account from USA Today.

With less than 30 minutes before stock markets open, investors are reacting negatively to the jobs report: Futures for the Dow Jones Industrial Industrial Average fell 152 points to 12,086, according to MarketWatch. Yesterday, Gannett's stock closed at $13.88 a share, up four cents.


  1. No tears. We're hiring for Deal Chicken!

    Guaranteed to pull us all out of the doldrums and modeled on the fabulous Groupon product, which just had its $750 million IPO yesterday....

    .... and after three years, STILL has yet to make a profit.

  2. They said on CNBC, the business channel, this morning that when Groupon is floated, it is likely to come in with a market value of $21 billion.

  3. Cmon, Jim. We come to this blog for gannett news. Everyone else on the planet has the unemployment rate story.

  4. 10:59 The monthly employment reports are the single most important measures of the U.S. economy's health. They also have a huge impact on consumer confidence; headlines about rising unemployment and weak job growth lead people to spend more cautiously.

    For all those reasons, the reports are closely watched by companies, including Gannett, as they plan for the near future.

  5. There are indirect reasons Gannett employees might be interested in the monthly jobs report because the longer this level of high unemployment continues, the more pressure will mount on Congress to fund a jobs bill of some sort to get people back to work. Gannett and other newspapers, representing the slumping and hard-hit newspaper industry, will be sure to be in there lobbying for tax incentives or subsidies to hire unemployed young people for the papers. That could have knock-on effects and increase the probability older veterans will be shuffled along. I do hear both Republicans and Democrats talking a lot about job incentives as part of the debt-limit compromise which we will likely see this month.

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  7. Is there really any surprise here? It seems to me the only folks trying to convince the American public that we're in a recovery are politicians and the business leaders themselves. Of course, the actions of both groups speak for themselves. Neither is doing anything to help middle-class or lower wage earners. Instead they're cutting costs and taking care of themselves, virtually assuring that a recovery will be extremely slow ... if it comes at all.

  8. Time to pay the middle class6/04/2011 10:17 PM

    You may remember that some experts predicted this would be a "jobless" recovery when the government finally admitted this was a recession and not a downturn. The problem with a consumer based economy is, if I don't get a pay check, or my company pays me less money, I don't buy what ever your company makes or service it offers. Now your pay check goes down or you get laid off and you stop buying what ever may company sells. Just before Gannett started with the lay-offs and furloughs, I was set to buy a new car. That went out the window as soon as my job became less secure. I bought a used car, with cash and am running it into the ground. Unless things turn around for me personally, that car will be replaced with another used car.
    Corporations need to wise up. This isn't about some idealistic principal, it is about your survival in the market place.
    People will continue to sit on their wallets until corporate America decides to put more in those wallets. There will be no recovery until people feel secure enough that they'll keep their jobs and that they'll get a decent raise to make those "big ticket" purchases.
    Most of us learned (some the hard way) that the credit card companies are not our friends, so don't expect that type of living beyond one's means to return.
    Like it or not corporate America, it comes down to the pay check and until the middle class starts getting a bigger one, you can count on more years of this stagnation.

  9. 10:17PM, exactly what I have been doing since the 1st round of layoffs/buyouts. Packing money away and cross the board cut back.

  10. 10:17 -- You're right, but I think it does have to come down to idealism, as there is nothing for corporate America to wise up about. You are exactly right that employees who are fearful of losing their jobs won't make major purchases, but most corporations don't care. They can continue to make tidy profits by simply cutting costs. Gannett is the perfect example of this. Dumbow doubled his earnings last year despite the fact that newspapers have terrible circulation and sales are way lower than they used to be.

    If Dumbow had some sort of idealism, he might try to keep as many people employed as possible because it would be good for the country. But he doesn't think like that. He's out for No. 1 and it really doesn't matter if he makes thousands of employees uncomfortable. He's still making a very large profit and by the time things get really bad it will be someone else's problems.

    Many, many American CEOs are in the same exact position. It's going to take some idealism ... or serious government interference ... or this will never change. Like it or not, corporate leaders are completely unconcerned with the discomfort of the populace at large. If they cared and wanted to build better consumers, America wouldn't have one of the highest rates of poverty in the civilized world.


Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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