April 1st, 2009
12:51 PM ET

Financial Dispatch: Employment picture remains hazy

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Andrew Torgan
CNN Financial News Producer

We’ve got some mixed news today on the employment front ahead of Friday’s big jobs report for March.

The private sector lost more than 700,000 jobs in March, according to payroll-processing firm ADP, but a separate report suggests that the pace of job cuts may be slowing.

The ADP report said the private sector eliminated 742,000 jobs on a seasonally adjusted basis in March. That up 36,000 from last month's revised figure of 706,000.

Separately, outplacement firm Challenger, Gray & Christmas reported that the number of planned job cuts announced in March fell for the second straight month.

The number of existing homes put under contract ticked up in February after hitting historic lows the previous month.

The National Association of Realtors reported that its monthly Pending Home Sales Index rose 2.1% in January.

The Midwest saw the largest gain of any regions, with pending home sales jumping 14.5%. The Northeast also recorded double-digit growth at 10.6%. The South inched up 4.4%, and the West dropped 13.5%.

A closely-watched index of the manufacturing sector shows activity rose slightly in March, inching up for a third month, but the reading still indicates an ongoing contraction.

The Institute for Supply Management's Manufacturing Index rose to 36.3 in March, up from 35.8 the previous month.

The slight month-to-month improvement indicates that the rate of contraction has slowed, but not reversed itself. Manufacturing is widely considered to be a key indicator in assessing the strength of the overall economy.

Index readings above 50 are considered to indicate growth, while levels below 50 signal contraction. Readings below 41 are associated with a recession in the broader economy.

The government reportedly may seek to ease General Motors into what it calls a “controlled” bankruptcy, somewhere between a prepackaged bankruptcy and court chaos, by persuading at least some creditors to agree to a plan that would cleave the company into two pieces.

Instead of signing on every creditor as is typically required in prepackaged deals, Obama Administration officials are using as leverage the promise of taxpayer financing. Many regard the government as the only lender willing to step up with money - in bankruptcy or out.

CNNMoney.com takes a look at what a bankruptcy at GM or Chrysler would mean for everyone from consumers, to autoworkers, suppliers and dealerships, as well as investors and taxpayers.

Also on the automotive front, the world’s major automakers today report their U.S. car and truck sales figures for March, and it goes without saying that the numbers from Detroit’s Big Three are expected to be horrendous.

Ford was first out of the gate, posting a 41% in sales last month from a year earlier.

Honda Motor, Japan's No. 2 automaker, says it will cut production in North America by temporarily shutting factories from next month and will reduce pay for workers as sales in the United States plunge to multi-decade lows.

Gas prices declined by 1-tenth of a cent overnight to $2.047 a gallon.

Twenty-nine states and the District of Columbia have regular unleaded gas prices of $2 and higher. 21 states have regular unleaded gas prices below $2.

The highest gas prices are in Alaska ($2.508). The cheapest gas prices are in Wyoming ($1.853).

3M says it's cutting its worldwide workforce by another 1,200 jobs, or 1.5 percent, because of the global economic slump.

A 3M spokesperson says that fewer than half the jobs will be in the United States but include "several hundred" in Minnesota, mostly at the company's headquarters.

3M, the maker of Scotch tape, Post-It Notes and other products, has operations in more than 60 countries that employ 79,000 people.

And when it takes nearly half a year to find a new job, a severance package from your previous employer can be a lifesaver. But what if that safety net was gone?

A new survey shows many companies say they will take a closer look at their severance packages in response to ongoing economic conditions.

According to the survey, 20% of companies plan to make changes to their severance plans and 31% said they were unsure. Of those making changes, 43% plan to reduce cash payments, and 21% plan to reduce benefits like health insurance, retirement benefits, disability, financial assistance or life insurance to laid-off workers.

Filed under: Andrew Torgan • Economy • Finance • Gas Prices • Oil • Unemployment • Wall St.
soundoff (3 Responses)
  1. Dean Schindler

    It is a frightening thing. 6 months on average to find another job, and I think that is actually sugar-coating reality. I recently even heard about a teacher that was let go because the school decided they could no longer support her classroom. What is happening to us? And I have always counted on my severance, 401K and savings to help me out in the case I were to be suddenly unemployed...and now these things have wasted away too. All I ever hear is that you should have at least 6 months of salary saved up...how is this possible when the cost of living keeps rising, unemployment is still climbing, and companies cannot afford to give out bonuses or salary increases??? It has become a very vicious cycle.

    April 1, 2009 at 3:56 pm |
  2. Michael "C" Lorton, Virginia

    If Chrysler and GM are forced into bankruptcy---it will add more insult to our economic injuries; unemployment will increase; and two more nails will be added to our "economic coffin,"--and if the trend continues-–we will all be attending an economic funeral.

    April 1, 2009 at 2:27 pm |
  3. earle,florida

    The job number is large,but like all large numbers, they're a accumulation of many sectors,of which some are contributing,and others deleteing. My point being that in the south,the furniture manufacturer's which employ a huge number of folks start re-tooling for new lines,and temporarily shut-down. This also applies to the service,and hotel industries,when snowbirds,and tourism slacks off because of the warmer weather up north,across the pond,and guest start exiting by the thousands! Finally the government has,and always is a large employer,but with their current fiscal budget ,hiring also has been deferred to a later date. Thanks JMHO

    April 1, 2009 at 1:26 pm |