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A strange week for the economy. Another financial expert has committed “suicide” using a nail gun. The unemployment numbers were a huge miss but the unemployment rate once again went down. The stock market was up 165.5 points on the expectation that the Fed will open the printing press floodgates to “fix” the economy. People’s spending exceeded their judgment as consumer borrowing hit $18.8 billion for December. The most ignored story for last week was the federal government’s breach of the debt ceiling. I suppose no one expects any fiscal restraint from our leaders at this point. Layoffs in technology, automotive industry (Volv0) and paper had the biggest numbers. But the biggest news last week for jobs was the large loss of jobs due to Obamacare.
Do not expect any improvements in the next few weeks as the government is already blaming the weather for all future reports.
David DeGerolamo
1. 4th Financial Services Executive Found Dead; “From Self-Inflicted Nail-Gun Wounds”
The ugly rash of financial services executive suicides appears to have spread once again. Following the jumping deaths of 2 London bankers and a former-Fed economist in the US, The Denver Post reports Richard Talley, founder and CEO of American Title, was found dead in his home from self-inflicted wounds – from a nail-gun. Talley’s company was under investigation from insurance regulators.
2. Payroll Data Shows a Lag in Wages, Not Just Hiring
The government said on Friday that employers added 113,000 jobs in January, the second straight month of anemic growth, despite some signs of strength in the broader economy. The unemployment rate inched down in January to 6.6 percent, the lowest level since October 2008, from 6.7 percent in December.
But the report also made plain what many Americans feel in their bones: Wages are stuck, and barely rose at all in 2013. They were up 1.9 percent last year, or a mere 0.4 percent after accounting for inflation. Not only was that increase even smaller than the one recorded in 2012, it was half the normal rate of wage gains in the two decades before the last recession.
3. Why the bad jobs number is really bad for the Fed
January’s jobs number should have the Fed rethinking Bernanke’s taper promise. Is it time for the real Janet Yellen to step up?
4. Consumer Credit in U.S. Rose More Than Forecast in December
Consumer borrowing in the U.S. increased more than forecast in December as Americans made holiday purchases with credit cards and took out loans for cars and schooling.
The $18.8 billion gain exceeded the highest estimate in a Bloomberg survey and followed a revised $12.4 billion advance the previous month, the Federal Reserve said today in Washington. The median forecast of 30 economists called for a $12 billion increase. For all of 2013, consumer credit increased 6.2 percent after rising 6.1 percent a year earlier.
5. US Officially Hits Debt Ceiling Limit
The United States has hit its debt ceiling limit.
The Treasury Department will now be forced to resort to “extraordinary measures” to prevent a default on the nation’s debt after the U.S. reached its borrowing limit Friday.
6a. The Human Tragedy of ObamaCare’s Job Losses
The CBO says that the lure of ObamaCare subsidies will discourage enough people from working such that the economy will see a loss of 2.3 million “full-time-equivalent workers” by 2021, compared to CBO’s previous estimate of 800,000. And the CBO predicts that 2.5 million equivalent workers will be lost by 2024.
6b. Dell layoffs this week: 15,000 to be hit
Dell’s expected layoff program is expected to begin this week, and over 15,000 people may lose their jobs worldwide.
Insiders speaking to the Register say that the PC giant’s restructuring operation has resulted in cuts in every department, “some of these have already been downsized and are now being told to cut 15 per cent more heads.”
6c. 500 employees to be laid off at International Paper next week
As the shutdown of International Paper in Courtland continues, company officials said 500 employees will lose their jobs starting next week.
The latest round of layoffs comes as the company shuts down its final two paper machines. International Paper said certain equipment at the mill will need to continue operations, requiring about 200 employees to remain on site for an unspecified amount of time.
