Month by month, the U.S. job market is regaining its health.
So many jobs are being added that the unemployment rate has dropped for five straight months. At 8.3 percent, it’s at a three-year low.
Whether the job market actually feels stronger, though, depends on your perspective.
The headline numbers mask vast disparities _ from the New Yorker thrilled to have found a catering job to the Indianapolis truck driver forced to take a 40 percent pay cut to work again.
Even where hiring has picked up, scars from the Great Recession remain. In Fort Madison, Iowa, Pinnacle Foods Group is expanding a canned-meat plant and adding 65 jobs. Yet that same work used to be done at a company plant in Tacoma, Wash., that once employed 160 but has since closed.
A government report Friday that employers added a surprising 243,000 jobs in January ignited cheers for the job market, which had been slow to recover in the 2 1/2 years since the recession officially ended. Many economists see signs of a self-fulfilling “virtuous cycle,” in which more jobs fuel more consumer spending, which sparks further hiring and spending and more jobs.
The presidential election is sure to be determined, in part, by how Americans interpret the shifts in the job market.
Here’s how things look to employers, job seekers and analysts with varying views of the job market:
_ THE RELIEVED AND THE HOPEFUL
Robb Stiffler landed a job two weeks ago at Crown College, a liberal arts college in St. Bonifacius, Minn. He makes sure rooms are available and set up for school events. Stiffler used to run his own company selling paint sprayers. But the housing bust put him out of business.
Then, in nine months in real estate, he sold one house. At first, he lived off his credit cards. Then it was unemployment benefits.
He was elated to get the Crown job, his first to provide a retirement plan. Unemployment, he says, “was agony.”
Vaughan-Bassett Furniture Co. is opening a plant in Galax, Va., near the North Carolina border. It expects to hire 50 workers by July and perhaps 65 more over the next year or two.
January’s buoyant national job numbers “play right into what we have already sensed and begun to act on,” says Doug Bassett, the chief operating officer.
The company’s revenue has risen 20 percent in the past two months compared with the same period a year earlier. Vaughan-Bassett credits an improving economy, rising interest in U.S.-made products and higher prices on Chinese imports it competes with.
Across the country, Ancestry.com, which helps track family lineage, expects to add 150 employees this year _ if it can find them.
The company, based in Provo, Utah, must compete with technology firms for engineers with expertise in artificial intelligence and in handling mountains of data (30 million family trees in Ancestry’s case).
“It’s only gotten harder” to find qualified applicants as the job market has improved, says Eric Shoup, senior vice president. “The likes of Google, Zynga, Facebook and others are also growing. They are soaking these people up.”
James Paulsen, chief investment strategist at Wells Capital Management, says the stock market’s celebration of Friday’s jobs report was another step in reversing Americans’ economic pessimism.
“For me, the takeaway isn’t so much about the healing of the job market as it is about the beginning of an attitude adjustment for this country,” Paulsen said.
Michael Biggers of Brooklyn, N.Y., was happy to land a job recently at a catering company.
The job hunt took four months. Unemployment benefits helped pay the bills. And his four kids, ages 3 to 12, loved having him home. Biggers, 32, just wishes he didn’t have to apply for jobs online.
“I feel like I would have found something faster if I met with a person face to face,” Biggers says. “I’m just confident about me.”
Perhaps no one has more reason to applaud the improving job numbers than President Barack Obama. His re-election hopes rest heavily on whether most voters will agree that the economy has improved on his watch.
“The recovery is speeding up,” Obama said after the January employment report was released.
_ THE CAUTIOUS AND THE SKEPTICAL
In a few weeks, entrepreneur Joe Wong will open a restaurant overseeing the Sacramento River in Redding, Calif. The eatery, View 202, will employ 100.
But Wong, president of J&A Food Service, isn’t convinced the economy is improving. He knows he’ll have to keep menu prices down to attract the budget-conscious. Unemployment still exceeds 11 percent in Redding.
“We’ll probably have 1,000 apply” for jobs, Wong says. The January jobs report is “going to get everybody excited. But we’ve heard it before. It just comes back down.”
Farther south, the economy is only starting to improve in California’s Riverside and San Bernardino counties, an area that was clobbered when housing prices plunged.
“We still have large numbers of foreclosures on the books, and property values and sales taxes are also lagging behind projections,” says Tom Freeman, a Riverside County commissioner.
At least, Freeman says, businesses that sell goods overseas have been a bright spot.
In downtown Indianapolis, Windsor Jewelry hired a part-time worker for the holidays, then made him full-time as demand held up. Owner Greg Bires says he might hire another person this year. Business is a little steadier now.
Still, rising gold prices have pinched the company.
“That’s been the biggest problem _ just not knowing what tomorrow was going to bring,” Bires says. “So we’ve been kind of afraid to make any major changes.”
Among the highest-profile skeptics of an improving job market is Mitt Romney, the Republican front-runner in the presidential race.
On Friday, Romney blamed Obama’s policies for slowing the recovery, hurting families and making it harder for businesses to rebound.
“And for that,” Romney said at a campaign stop in Nevada, “the president deserves the blame that he’ll receive in this campaign.”
_ THE DISCOURAGED
Job seekers still face tough odds. There are still more than four unemployed Americans, on average, for every job opening. In a healthy economy, by contrast, that ratio would be roughly 2-to-1.
Sara Pereda, an executive assistant in New York City’s entertainment industry, has applied for several job openings and received no responses, even though she’s sure she was qualified. The same for many of her friends. Pereda, 30, has been seeking a job with more opportunity for advancement.
“You can send out 10 resumes and get one _ and that’s a maybe,” Pereda says.
In Buffalo, N.Y., Rosanne DiPizio, vice president of her family’s DiPizio Construction, says there isn’t enough work for her company to justify hiring right now. It relies mostly on government road-construction contracts. And governments have been cutting back.
DiPizio also runs a concrete plant that would normally employ 100. It’s down to 85.
“We will employ more if we have more work,” she says. “It’s that simple.”
Jeff Searcy says fewer people are showing up at a support group he runs for job hunters at a church in Charlotte, N.C. Searcy isn’t sure why. The area is suffering from 9.9 percent unemployment, far above the national average.
“We know it’s not because everyone has found a job,” Searcy says.
His theory?
“After you’ve been to 10 lectures on networking, how much more can you learn?”
Aaron Cruz of Indianapolis says that while hiring has picked up, there’s a catch: Landing a job can mean accepting part-time work or a pay cut. Cruz lost his job as a truck driver in December 2008. He didn’t find full-time work again until last June.
His old job paid $23 an hour; his new one, $14.
“The money I’m making now at this new job … I made in my mid-20s,” he says. “I’m 42 now.”
He doesn’t put much stock in better employment numbers. People forced to take part-time jobs once they exhaust their unemployment aid, Cruz notes, aren’t counted as unemployed. Yet they still struggle.
“Every time I hear them, I doubt the numbers,” he says.
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Dow Chemical Co. said Thursday it posted a loss in the fourth-quarter because of a one-time charge that caused it to pay higher taxes at its Brazilian operations.
Shares fell nearly 3 percent in trading before the opening bell.
The Midland, Mich. company, the nation’s largest chemical maker, reported a loss of $20 million, or 2 cents per share, compared with a year-ago profit of $426 million, or 37 cents per share. Excluding a charge of 27 cents per share, Dow would have earned 25 cents per share in the quarter.
Revenue rose 2 percent to $14.1 billion.
Results were below Wall Street’s expectations. Analysts polled by FactSet expected a profit, excluding items, of 31 cents per share on revenue of $14 Business Card Holders.18 billion.
Volume fell 3 percent in the quarter. Demand slipped as customers in North America, Europe and other regions worked through existing inventory instead of replenishing their stockpiles. Dow says it saw global economic “deterioration” in the period, with “considerable weakness” in Western Europe. Europe accounts for a quarter of the company’s sales.
Prices rose 5 percent, offsetting higher feedstock and energy costs.
The head of AT&T on Thursday suggested that the company might sell its directory business, which employs more than 500 people in St. Louis.
The company also reported a $6.68 billion loss for the December quarter, fueled largely by a $4 billion cancellation charge paid after the failure of its planned purchase of T-Mobile.
But the loss also included a non-cash charge of about $2.9 billion to reflect the falling value of its directory business, which includes the Yellow Pages phone book and its Internet incarnation.
AT&T expects earnings per share to grow by a mid-single-digit percentage in 2012, a bit lower than analysts had expected.
In a morning conference call with analysts, AT&T CEO Randall Stephenson labeled the directory business as underperforming.
“That’s one area that we’re going to obviously take a very hard look at, and while I don’t want to give any indication on M&A activity, it’s one of these areas that we’re going to have to decide, do we keep it, do we restructure it, as we move forward,” he said. M&A means mergers and acquisitions, the buying and selling of companies.
AT&T declined to give any further details on the directory business presence in St guaranteed high risk personal loans. Louis, or the company’s intentions. It also declined to say how many people the business employed locally.
However, that business employs 575 union members in St. Louis, plus management personnel, said Jim Kolve, executive vice president of Communications Workers of America Local 6300. The local workers handle sales, accounting, customer service and part of production, working on both the print director and the Internet.
AT&T’s directory business is the most profitable in the industry, said analyst Juli Niemann of Smith Moore & Co.
“This was a cash cow feeding tons into the company,” she said.
The phone company might use money from the sale to fund upgrades of its phone system and build its video business.
“They have big debt and an underfunded pension,” Niemann said. “They need the cash.”
The directory business is part of AT&T’s Advertising Solutions unit, which reported quarterly revenue of $781 million versus $926 million a year earlier.
Associated Press contributed to this report
Ever since oil was discovered in the North Sea off the British coast in December 1969, the Scottish National Party claimed it for Scotland.
Now in power and closer than ever to a referendum on whether to break from the U.K. after more than 300 years, the SNP government in Edinburgh led by Scottish First Minister Alex Salmond is counting on tax revenue from the oil industry as a key pillar of the economy along with financial services.
China and the United States have pledged during a visit by Treasury Secretary Timothy Geithner to cooperate on boosting the global economic recovery, but Chinese backing for U.S. sanctions on Iran’s oil industry appeared unlikely.
China buys almost one-third of Iran’s oil exports and has rejected the U.S. sanctions as a tool to rein in Tehran’s nuclear program. That sets Washington up for a public setback if the government of the world’s second-largest economy refuses to cooperate.
Geithner was expected to make the U.S. case for sanctions in meetings Wednesday with Premier Wen Jiabao, Vice President Xi Jinping _ who is in line to become China’s next leader _ and Vice Premier Li Keqiang, another rising star.
Geithner met with his counterpart, Vice Premier Wang Qishan, on Tuesday night. He said he told Wang that the two sides “share so many important interests, and among those are increasing our cooperation on global economic issues.”
China’s official Xinhua News Agency said China and the United States pledged to further cooperate to boost the global economic recovery, and quoted Wang as saying the world economic situation is still “very complex and grim.”
Wang also called on the United States to loosen export controls of high-tech products to China, one of China’s complaints about the countries’ trade relationship. U.S. critics, meanwhile, say Chinese currency controls keep the yuan undervalued and give its exporters an unfair advantage, distorting trade at a time when Washington and other governments are under pressure to bring down unemployment.
China’s trade surplus with the United States widened 24.2 percent to $17.4 billion in December, according to data released Tuesday.
Geithner also is due to visit Tokyo, another major buyer of Iranian oil, for talks after he leaves Beijing on Thursday morning.
China has criticized U.S. sanctions on Iran, approved by President Barack Obama on New Year’s Eve, as improper and ineffective. Beijing supported U.N. sanctions on Iran’s nuclear program but says action should be multilateral.
The sanctions would target Tehran’s oil industry by barring financial institutions from the U.S. market if they do business with Iran’s central bank.
China’s oil imports “have nothing to do with the nuclear issue,” a Chinese deputy foreign minister, Cui Tiankai, said Monday.
“We should not mix issues with different natures, and China’s legitimate concerns and demands should be respected,” Cui said.
Analysts in Beijing said China has no reason to go along with the sanctions. “China does not want to be seen as helping the U.S. when China’s own interest is concerned,” said Wang Lian, an Iran expert at Peking University’s School of International Relations.
He said Chinese opposition might be reinforced by Washington’s latest military strategy report published last week. It singles out Beijing as a power with the potential to affect the U.S. economy and security.
Industry analysts say that even if China agreed, it would face formidable challenges in trying to replace Iran as an oil source.
China’s fast-growing economy is the world’s biggest energy consumer and imports half its oil. Some 11 percent comes from Iran, or about 600,000 barrels per day in November, according to energy market analysts Argus Media.
Still, Geithner’s trip might not be wasted, because Washington is only starting a campaign to promote its sanctions, Peking University’s Wang said. He said China might face pressure to cooperate if other governments agree to comply.
“The U.S. is not wasting their efforts,” Wang said. “Pressuring China is what they can do, but it is fairly difficult to get China to stand on their side.”
The so-called January effect, in which small-cap stocks have tended to outperform large-cap stocks at the start of each year, is not evoking the same bold confidence that it has during more predictable market periods.
“Small-cap stocks do tend to benefit from the increased attention that investors pay to their stock portfolios at the beginning of each year,” acknowledged Tom Jacobs, lead adviser for Motley Fool Special Ops (a special situations and opportunistic value service) in Marfa, Texas. “Having said that, however, a number of factors such as Europe’s problems are really freaking out investors right now.”
For example, his current favorite small-cap stock, Canadian-based Primero Mining Corp. (PPP), is actually a play on precious metals. That company owns Mexico’s highly productive San Dimas gold and silver mine; its cash flow equals its market capitalization; it carries little debt; and it has stated its intention to expand its metals assets in the Americas.
Investor nervousness about stocks of all sizes has encouraged the managers of some of the better-performing small-cap portfolios to aggressively seek out stocks they consider currently undervalued.
“Investors should remember that, in an improving economic environment, small caps tend to outperform large-cap stocks,” said Matthew Hart, portfolio manager of the $1.1 billion Invesco Van Kampen Small Cap Growth Fund A (VASCX), which has a three-year annualized return of 13 percent.
But while small caps are capable of supplying high growth and high returns, the economic sensitivity of these companies can never be disregarded, Hart cautioned.
“Small-cap stocks still look good and their valuations are reasonable when compared to large-cap stocks,” said William McVail, portfolio manager of the Turner Small Cap Growth Fund (TSCEX), which has a three-year annualized return of 21 percent. “We like the energy sector and especially the natural gas plays.”
The small-cap choices they prefer feature unique characteristics.
One example owned by both Hart and McVail is Clean Harbors Inc. (CLH), one of the nation’s largest providers of environmental services. As the largest operator of non-nuclear hazardous waste disposal in North America, Clean Harbors serves more than 50,000 customers.
Strong financially with modest debt, Clean Harbors has the assets, facilities and expertise that are difficult for competitors to match. McVail considers Clean Harbors especially well-positioned to profit from hydraulic fracturing — the method by which natural gas is released from shale rock. That practice has evoked controversy as its environmental, health and safety impacts are debated.
Insight Capital Research and Management Inc. in Walnut Creek, Calif., also recommends Clean Harbors. Insight Capital’s CEO and CIO Jim Collins, a longtime small-cap expert, predicts that “2012 will be a stock picker’s market,” requiring “discipline and patience.” Health care, technology and energy are Collins’ favored small-cap themes for the year.
Collins’ two other favorite small-caps are unique: Questcor Pharmaceuticals (QCOR), which develops medications for central nervous system disorders such as epilepsy and multiple sclerosis, and Silicon Motion Technology Corp. (SIMO), which manufactures graphics, video and audio applications for products ranging from handheld devices to LCD products and whose clients include the likes of Hewlett-Packard and Intel.
“I see the employment picture improving in 2012, and I believe we’re in the sixth or seventh inning of the bad housing environment,” said McVail of Turner Small Cap Growth. “For example, we have a portfolio holding in TrueBlue Inc. (TBI), a blue-collar staffing company in Tacoma, Wash., and any turn in the economy is going to be reflected in a company like this.”
TrueBlue, with most of its branch offices located in the U.S., primarily sends manual-labor temps to small and midsize businesses. With strong finances, no debt and plenty of cash, its business model and brand are well-respected.
The top portfolio holdings of Turner Small Cap Growth were recently Healthspring Inc., Taleo Corp. A, Genesee & Wyoming Inc., The Finish Line Inc., Clean Harbors Inc., Questcor Pharmaceuticals, SuccessFactors Inc., Cubist Pharmaceuticals, Northern Oil & Gas Inc. and WellCare Health Plans. This “no-load” (no sales charge) fund requires a $2,500 minimum initial investment.
While an economic upturn is still not a certainty, it would make a positive difference for small-cap stocks in 2012.
“The U.S. consumer is gradually improving, and the employment picture, while not great, is at least stabilizing,” says Hart of Invesco Van Kampen Small Cap Growth. “What we haven’t seen on the consumer side is wage growth and, once we start to see that, I think the picture will improve even more.”
Shares in British Sky Broadcasting PLC are falling for the sixth straight session Tuesday, a day after News Corp.’s bid for the satellite broadcaster was referred to the competition regulator.
With the review likely to take many months, there’s little incentive for short-term investors, such as hedge funds, to keep hold of the stock. BSkyB shares were 2.1 percent lower early Tuesday at 700 pence ($11.07). The decline means that the stock is underperforming in the FTSE 100 index of leading British shares. Shares around the world have been hit Tuesday by mounting fears over the financial health of Spain and Italy.
BSkyB shares have taken a battering over the past week, falling from 850 pence, as a phone-hacking at the Sunday tabloid News of the World escalated.
The paper, which closed Sunday after 168 years, was owned by News Corp.’s British subsidiary News International. News Corp. shares have also taken a pounding, as investors doubt whether it will get the 61 percent of BSkyB it doesn’t already own.
On Monday, News Corp. withdrew its promise to spin off Sky News, which had been a condition for buying the remaining shares in BSkyB, triggering a referral to the Competition Commission from Culture Secretary Jeremy Hunt.
Britain’s Competition Commission now must hold a full-scale inquiry into whether the takeover would break anti-monopoly laws. These inquiries usually take six months and Murdoch must be hoping that the current febrile atmosphere surrounding the bid cools down.
“News Corp. now has a decent time for the crescendo of allegations to peak and be dealt with and relevant actions to be taken, assuming these are containable,” Investec Securities analyst Steve Liechti said.
However, with police apparently still in the early stages of a criminal investigation of the News of the World, Liechti said there is a danger that News Corp. could be forced to reduce its stake in BSkyB if Britain’s communication regulator decides it is not “fit and proper” to control a broadcasting license.
On Tuesday, former Prime Minister Gordon Brown joined the criticism of News International, repeatedly accusing the company of employing criminals to obtain confidential information about his bank account, taxes and other issues.
“If I, with all the protection and all the defenses and all the security that a chancellor of the exchequer or a prime minister, am so vulnerable to unscrupulous tactics, to unlawful tactics, methods that have been used in the way we have found, what about the ordinary citizen?” Brown said in an interview with the BBC.
TMX Group Inc. says London Stock Exchange Group plc has agreed to pay a special cash dividend of $4 per share, sweetening its bid for the Canadian stock market operator by $660 million.
TMX says its shareholders will get the special payment of $4 a share in cash when the proposed merger closes.
The move sweetens the friendly merger
After two years without seeing an increase in their Social Security checks, more than 59 million retirees and other beneficiaries can expect a bump up in benefits next year.
The Social Security trustees’ annual report released last month estimates that the cost-of-living adjustment in next year’s checks will be 0.7 percent. The increase, which will be announced in October, could be higher, depending on where prices head in the coming months.
Still, experts say, retirees could see all or some of that raise eaten up by higher Medicare premiums.
News of the potential rise in benefits didn’t generate much excitement last week among seniors at the Allen Center, a Baltimore senior center, although some retirees say they would be grateful for any boost.
“If it was $5 more, I would be happy,” Frances McCready, 69, a retired cashier, said about her monthly benefit Same day payday loans. “I would dance a jig.”
The past two years have been “very bad,” said McCready, who receives $616 a month from Social Security and about $400 working for the Department of Aging.
She said she lives with her son and his wife, who help her pay her bills.
“If it wasn’t for them, no way in the world could I make it,” she said.
The Social Security trustees projected the cost-of-living adjustment using inflation assumptions from December. Since then, the price of gas has spiked and then pulled back. If fuel prices tick up again, beneficiaries could see as much as a 2 percent increase.
The actual cost-of-living increase will be based on the inflation rate in July, August and September, and how it compares with the rate during the third quarter of 2008
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