June 23 (Bloomberg)
-- More Americans than forecast filed first-time jobless claims last week and consumer confidence fell, highlighting Federal Reserve Chairman Ben S. Bernanke’s concern that the slowdown in the economy may persist.

Applications for unemployment benefits increased 9,000 in the week ended June 18 to 429,000, Labor Department figures showed today. The level of claims exceeded the highest estimate in a Bloomberg News survey in which the median projection called for 415,000 filings. The Bloomberg Consumer Comfort Index dropped to minus 44.9 last week from minus 44.

Stocks slumped and Treasury securities rose as the figures, combined with a drop in new-home sales, showed the recovery was struggling to gain momentum. Bernanke said yesterday that joblessness above 9 percent and weakness in housing show the economy’s “headwinds” may be stronger than Fed policy makers initially estimated.

“The jobless claims numbers are troubling,” said Maxwell Clarke, chief U.S. economist at IDEAglobal in New York. “The Fed is a little nervous,” he said, and the economy is “going to start next quarter out on a weak note.”

Purchases of new homes dropped 2.1 percent in May to a 319,000 annual rate, figures from the Commerce Department showed today in Washington. The median price of new properties sold declined from a year earlier.

“Things are still going to be weak for a while,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida. “We need to see much better job growth and more confidence in general,” he said, adding that new-home sales are “still sort of bouncing around the bottom.”

Stocks Slump

The Standard & Poor’s 500 Index declined 1.6 percent to 1,266.43 at 11:27 a.m. in New York. The yield on the benchmark 10-year note fell to 2.91 percent from 2.98 percent late yesterday.

The Bloomberg Consumer Comfort Index dropped as American grew more concerned about the economy. The decrease from the previous week, within the survey’s margin of error of 3 percentage points, left the gauge close to its average for the year. The report showed an index of consumers’ views of the economy fell to the worst reading since April.

The data buttress the results of a separate Bloomberg National Poll conducted June 17-20. It found that two years after the start of the recovery, 25 percent of those surveyed worried the economy was getting worse, while 23 percent said they were hopeful the recovery was improving. By a 44 percent to 34 percent margin, Americans said they believed they were worse off than when President Barack Obama took office in early 2009.

Monthly Jobs Figure

Estimates for first-time applications for jobless benefits ranged from 400,000 to 425,000 in the Bloomberg survey of 47 economists. The claims data coincide with the week the government surveys employers every month for the monthly jobs report. The Labor Department will issue the June employment count on July 8.

The four-week moving average, a less-volatile measure of initial claims, held at 426,250.

The number of people continuing to collect jobless benefits dropped by 1,000 in the week ended June 11 to 3.7 million. The figure does not include the number of workers receiving extended benefits under federal programs.

Emergency Claims

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 68,000 to 3.95 million in the week ended June 4.

Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.

After improving at the beginning of the year, labor market conditions have deteriorated. Payrolls grew by 54,000 workers last month, the smallest gain in eight months, after increasing by 232,000 in April, Labor Department data showed June 3. The jobless rate rose to 9.1 percent, the highest since December, from 9 percent.

Fed officials yesterday lowered their projections for employment, predicting the jobless rate will average 8.6 percent to 8.9 percent in the final three months of 2011, compared with 8.4 percent to 8.7 percent projected in April.

“We expect the unemployment rate to continue to decline but the pace of progress remains frustratingly slow,” Bernanke told reporters following the monetary policy meeting.

Gannett Co., publisher of 82 newspapers including USA Today, is cutting about 700 jobs at its community-newspaper unit.

Gannett is reducing staff because the economic recovery is not happening “as quickly or favorably as we had hoped,” Bob Dickey, president of Gannett’s U.S. community publishing division, said in a memo. The division includes the Cincinnati Enquirer and Indianapolis Star.

“While we are seeing improved circulation results and audience growth, weakness in the real estate sector, slow job creation and now softer auto ad demand continue to challenge revenue growth in the division,” Dickey said.

To contact the reporter on this story: Alexander Kowalski in Washington at akowalski13@bloomberg.net ; Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

Tags USA  Labor Department  economy  jobs 

Posted by Mike Gupton at 11:41 AM 0 Comments

2011-2012 Economic Outlook:

Introduction
Despite a very challenging external environment, Canada’s economy has outperformed its G7 peers in many respects. It weathered the financial and economic crisis better than most industrialized countries and it staged an impressive turnaround. Real GDP grew 4.9 per cent (annualized) in the final quarter of 2009 and a resounding 5.6 per cent in the first quarter of 2010, fueled by a strong rebound in consumer spending, residential investment and government expenditures.

After the sharp bounce back, Canada’s economy lost some of its swagger, expanding at a sluggish 2.3 per cent annual rate in the second quarter of 2010 and a meager 1.0 per cent in the third quarter. Additionally, the pace of job creation slowed considerably in the second half of the year.

In the first six months of 2010, employment growth averaged 51,400 per month. In the July to November period, employment gains averaged 7,620 per month.

To be sure, recessions that are associated with financial crises or that are highly synchronized have historically been followed by weak recoveries. The most recent recession was associated with both, creating a perfect storm. In 2011, strong headwinds—sluggish U.S. growth, the persistent strength in the Canadian dollar, faltering domestic demand and the waning impact of prior fiscal and monetary stimulus—will hold back GDP growth. Overall, Canada’s economy is projected to expand a modest 2.4 per cent (yearover-year) in 2011, following an estimated 2.9 per cent gain in 2010.

In 2012, the economy is forecasted to grow about 2.7 per cent, reflecting somewhat stronger domestic fundamentals and better growth prospects in the United States, Canada’s principal export market. As with all forecasts, ours are subject to a considerable degree of uncertainty and risk.

Read the whole article here www.kmggold.ca/blog/publications/Economic_Outlook_2011.pdf


The Canadian Chamber of Commerce is committed to fostering a strong, competitive and profitable economic environment that benefits all Canadians. This paper is one of a series of independent research reports covering key public policy issues facing Canada today. We hope this analysis will raise public understanding and help decision-makers make informed choices.
The papers are not designed to recommend specific policy solutions, but to stimulate public discussion and debate about the nation’s challenges.

Tags Commerce  economy  jobs  forecast 

Posted by Mike Gupton at 9:03 AM 0 Comments