March 5th, 2010
12:03 PM ET

Financial Dispatch: Unemployment rate holds steady at 9.7%

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Andrew Torgan
CNN Financial News Producer

It’s the report that Wall Street and Main Street have been waiting for all week: the government says the economy shed 36,000 jobs last month, while the unemployment rate held steady at 9.7%. Both readings came in better than expectations.

But the results were still worse than the previous month, as just 26,000 jobs were lost in January, according to the revised estimate.

Also, the government said the winter storms that blanketed the East Coast with several feet of snow last month possibly skewed the results. The Labor Dept.'s jobs survey was conducted in the middle of February, which coincided with blizzards that temporarily shuttered some businesses and kept many workers home without pay. Those employees would not have been counted on the government's payroll survey.

Construction continued to be one of the worst-hit sectors, cutting 64,000 jobs in February. Retailers trimmed 400 jobs after adding 41,000 positions in January. Manufacturing businesses added just 1,000 jobs, down from 20,000 new jobs the month before.

But several industries showed solid gains in employment, including health care and the service industries. Also encouraging was the addition of 47,500 temporary workers, whose hiring often signals that employers are starting to gear up again.

All told, nearly 15 million people unemployed – or roughly the populations of Pennsylvania and Nevada combined.

Still, the number of workers who were seeking full-time employment but were working only part-time hours rose, pushing the so-called “underemployment rate” up to 16.8% from 16.5% in January.

The silver lining

So is there any good news? Well if you are lucky enough to have a job, your paycheck may be starting to get bigger – and that’s a sign of improvement in the job market.

Even a small gain in income is significant. If consumers have more money in their pockets, that can help to boost consumer spending and create the demand that will prompt a resumption of hiring.

According to the government's report, average hourly earnings have risen by nearly 2% over the past 12 months. And that's not the only evidence of a turnaround in pay.

An analysis of income and employment taxes withheld from more than 130 million U.S. workers by TrimTabs Investment Research found that total salaries and wages increased by 0.7% in February compared to a year ago. This is the first increase since 2008, and it represents $42 billion extra dollars in consumers' pockets compared to a year ago.

Job creation bill heads back to Senate

It’s all still a work in progress though… and lawmakers' efforts to spur job creation were delayed once again Thursday after the House amended a $15 billion Senate bill before passing it.

The amendments mean the Senate must again approve the four-prong measure, this time with no changes, if President Obama is to sign it into law. The Senate may not take up the legislation until next week.

The bill would exempt employers from Social Security payroll taxes on new hires who were unemployed; fund highway and transit programs through 2010; extend a tax break for business that spend money on capital investments, such as equipment purchases; and expand the use of the Build America Bonds program, which helps states and municipalities fund capital construction projects.

However, the House added two provisions to pay for the infrastructure spending and corporate tax breaks. The amendments require foreign financial institutions to give the IRS more information to help it catch tax cheats, and delays a tax break for foreign interest payments. The measure passed by a 217-201 vote.

Tax breaks for job seekers

We all know that job hunting can be expensive. The costs of hiring career coaches, printing hundreds of résumés at Kinko's and flying out for job interviews can really add up, especially for someone who doesn't have an income.

But finally, there's a benefit to being unemployed: job seekers can deduct search-related expenses, including employment and outplacement agency fees, travel costs and résumé costs. Your job search doesn't even have to result in employment for you to qualify!

Check out the details on CNNMoney.com.

Follow the money… on Twitter: @AndrewTorganCNN

Filed under: Andrew Torgan • Economy • Finance • Job Market • Unemployment
March 4th, 2010
03:52 PM ET

Financial Dispatch: Jobs numbers take center stage

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Andrew Torgan
CNN Financial News Producer

New claims for jobless benefits fell last week - another sign that layoffs may be easing as the economy slowly recovers. This comes on the heels if two reports out Wednesday that showed the pace of job cuts continued to slow last month, and ahead of Friday’s all-important February employment report.

The Labor Dept. says that initial claims for unemployment insurance fell by 29,000 to a seasonally-adjusted 469,000 in the week ended Feb. 27.

In addition, the number of people continuing to claim jobless benefits fell by 134,000 to 4.5 million in the week ended Feb. 20, the most recent data available.

But continuing claims only reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those people who have moved to state or federal extensions, or people whose benefits have expired.


Filed under: Andrew Torgan • Economy • Finance • Job Market • Unemployment
March 2nd, 2010
05:20 PM ET

Financial Dispatch: Postal problems, Ford on a roll

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caption="The U.S. Postal Service plans to revamp its outdated business model." width=300 height=169]

Andrew Torgan
CNN Financial News Producer

Snow? Rain? Gloom of night? No problem.

Saturday? Big problem…

The U.S. Postal Service is proposing an adjusted mail service schedule which will likely cut Saturday delivery. The agency is also suggesting the elimination of its prepaid retiree health benefits, closing some branches and expanding its use of self-service kiosks in grocery stores and other popular retail spots as part of its effort to work its way out of a mountain of debt.

And the USPS warns it will incur about $238 billion in losses in the next 10 years if Congress doesn't approve its plan it to revamp its outdated business model.

The agency posted a $3.8 billion loss in its 2009 fiscal year, the latest in a multiyear string of whopping losses. Mail volume was down 12.7% for the year, a trend the Post Office expects to continue over the next decade as more consumers opt for online bill payments and message delivery.


Filed under: Andrew Torgan • Economy
March 1st, 2010
03:29 PM ET

Financial Dispatch: Extended jobless benefits set to end

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Andrew Torgan
CNN Financial News Producer

More than 1 million Americans woke up this morning with a new and potentially devastating worry: they’re no longer able to apply for extended unemployment benefits.

Because the Senate failed to push back the Feb. 28 deadline to apply for this safety net last week, those without jobs are no longer able to apply for federal unemployment benefits or the COBRA health insurance subsidy.

Federal benefits kick in after the basic state-funded 26 weeks of unemployment coverage expire. During the recession, Congress approved up to an additional 73 weeks, which it funds.

These federal benefit weeks are divided into tiers, and the jobless must apply each time they move into a new tier.

But because the Senate did not act, the unemployed will now stop getting checks once they run out of their state benefits or current tier of federal benefits.

That could spell disaster for those who are counting on that income. In total, more than 1 million people could stop getting checks next month, with nearly 5 million running out of benefits by June, according to the National Unemployment Law Project.

Lawmakers repeatedly tried to approve a 30-day extension last week, but each time, Sen. Jim Bunning, R-KY., prevented the $10 billion measure from passing, saying it needed to be paid for first.

Filibuster threatens highway jobs

Meanwhile, Department of Transportation Secretary Ray LaHood today blamed Sen. Bunning’s filibuster for furloughing thousands of federal employees and threatening state jobs while shutting down highway construction projects nationwide.

"As American families are struggling in tough economic times, I am keenly disappointed that political games are putting a stop to important construction projects around the country," wrote LaHood, in a press release. "This means that construction workers will be sent home from job sites because federal inspectors must be furloughed."

LaHood was referring to Bunning’s filibuster blocking a bill that would, among other things, provide a short-term extension of the Highway Trust Fund, which is a federal fund set up to pay for transportation projects around the country.

As a result, Secretary LaHood says up to 2,000 DOT employees will be sent home without pay.

AIG selling Asia unit for $35B

Troubled insurance giant AIG has reached a definitive agreement to sell its Asian life insurance business to Britain's Prudential PLC in a deal valued at $35.5 billion.

The deal includes $25 billion in cash, which AIG says is the largest cash proceeds it's received from any sale during its current restructuring efforts.

The deal marks yet another step in getting AIG out from under the more than $100 billion it borrowed from the federal government beginning in 2008 to avoid collapse.

AIG’s CEO said in a statement that the deal will allow AIG “to realize value on a faster track to repay U.S. taxpayers” and will give the company “greater flexibility” with its restructuring plans.

Follow the money… on Twitter: @AndrewTorganCNN

Filed under: Andrew Torgan • Unemployment
February 11th, 2010
01:06 PM ET

Financial Dispatch: Jobless claims and foreclosures drop

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Andrew Torgan
CNN Financial News Producer

The number of Americans filing first-time claims unemployment insurance fell sharply last week to the lowest level in more than a year

Initial claims for jobless benefits fell by 43,000 to a seasonally adjusted 440,000 in the week ended Feb. 6, the Labor Dept. said. And the number of people who continue to collect benefits for a week or more - known as continuing claims – dropped by 79,000 to just over 4.5 million in the week ended Jan. 30, the most recent data available.

A Labor Dept. spokesman said the snow storm that crippled much of the East Coast last week did not impact the number of jobless claims filed, but at least one analyst expects that next week's numbers – reflecting claims from this week - will definitely be impacted by Wednesday’s blizzard.

The largest increase in initial claims for the week ending Jan. 30 was in Pennsylvania (+10,495) with layoffs in the construction, trade, and service industries.

The largest decrease was in New Jersey (-1,819) due to fewer layoffs in trade and service industries.


February 9th, 2010
01:51 PM ET

Financial Dispatch: Another Toyota recall

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Andrew Torgan
CNN Financial News Producer

Toyota’s troubles just refuse to go away. The Japanese auto giant today announced the global recall of more than 400,000 of its 2010 hybrid models, including the popular Prius, for problems in their anti-lock braking systems.

The worldwide recall involves 437,000 vehicles, including the Toyota Prius and the Lexus HS250h. Sales of the Lexus HS250h will be halted until a fix is in place.

Last week, Toyota acknowledged a problem with the software that controls the anti-lock braking system of the 2010 Prius and said it had already corrected the problem in cars that started to roll off the assembly line in Japan last month.

As recently as Friday, the company said a solution was near for the 200,000 of the 2010 model year Prius vehicles that have been sold in Japan and the 103,000 sold in the United States.

The Prius is the automaker's best-selling vehicle in Japan and its No. 4 seller in the United States.

And as Toyota's troubles mount, the automaker is gearing up for a new front in the battle to salvage its once-sterling image and credibility: Capitol Hill.

Toyota officials have been called to testify before two House panels this month, and the Senate may schedule one as well.

Slight improvement for job seekers

Despite the fact that there are nearly 15 million people out of work in this country, competition for new jobs is easing ever so slightly.

There are now about 5.9 job seekers, on average, competing for each job opening, according to the latest Job Openings and Labor Turnover survey from the Bureau of Labor Statistics. That's down from 6.4 the previous month - the greatest differential since the Labor Dept. began tracking job openings in December 2000.

It's the first time the ratio of job seekers to jobs dipped below six to one since June of last year. While that's a step in the right direction, it's still a far cry from pre-recession levels.

When the recession began in December 2007 there were only 1.7 workers per opening.

So where are the best places to find work? Consider hotels, casinos, hospitals or schools. Compared to other industries, the number of job openings as a percentage of total employment was greatest in the leisure and hospitality and education and health services industries, the report showed.

The match is back!

Finally, workers who took a hit on their savings last year might finally be in for some welcome news: Companies are stepping up efforts to help them save more for retirement.

Of companies that suspended or reduced 401(k) match programs, 80% planned to restore them this year, according to a survey conducted by Hewitt Associates, a global human resources consulting firm.

Large employers reinstating company matches for 2010 include American Express and FedEx.

Workers were dealt a double-blow during the recession, as historic stock market declines decimated retirement portfolios while companies slashed 401(k) matches to reduce costs.

And even though unemployment hovers at 9.7%, some experts say the restoration of company matches is a sign of employer confidence and may be a precursor to hiring.

Follow the money… on Twitter: @AndrewTorganCNN

Filed under: Andrew Torgan • Economy • Job Market
February 2nd, 2010
05:43 PM ET

Financial Dispatch: Auto sales, unemployment and big rip-offs

Andrew Torgan
CNN Financial News Producer

Auto sales numbers in the U.S. rose in January, although the overall results from the world’s major automakers were disappointing. Sales were hurt by weak consumer demand and the well-documented problems at Toyota.

Looking at the big picture, Ford, General Motors and Nissan all reported sales gains compared to a year ago. Honda, Chrysler and Toyota said January sales fell.

In particular, Ford's sales were good enough to lift its market share and vault it back into the No. 2 position in terms of U.S. sales, passing Toyota.

Filed under: Andrew Torgan • Economy • Housing Market • Unemployment
January 27th, 2010
04:36 PM ET

Financial Dispatch: Apple, Toyota, Obama (oh my!)

Andrew Torgan
CNN Financial News Producer

Lot’s of ground to cover today: a massive car and truck recall, the latest must-have gadget, a Fed meeting, and what is arguably the most important address of President Obama’s short time in office. So let’s take it all I order of occurrence.

First up, Toyota said late Tuesday it is asking dealers to suspend sales of eight models, and is halting production of those models, after a recall to correct a problem that could cause the gas pedal to stick.

About 2.3 million vehicles will be affected by the recall. That's about 500,000 more vehicles than Toyota sold in all of 2009.

In issuing the recall, the automaker said it had not yet found a way to fix the problem, but wanted owners to be aware of the potential issue.

The recall affects Toyota's 2009-2010 RAV4, Corolla and Matrix; 2005-2010 Avalon; certain 2007-2010 Camrys; 2010 Highlander; 2007-2010 Tundra and the 2008-2010 Sequoia (click here for what to do if your car is on the list).

Toyota owners with questions should call Toyota's customer service line at 800-331-4331.


Filed under: Andrew Torgan • Barack Obama • Housing Market • Technology
January 26th, 2010
02:57 PM ET

Financial Dispatch: Ford, GM hiring workers

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Andrew Torgan
CNN Financial News Producer

There are small glimmers of hope in the American auto industry. Ford Motor says it will hire 1,200 workers in Illinois as part of a $400 million plan to ramp up production of next year's Explorer SUV.

The automaker says it expects to fill the full-time jobs at its Chicago Assembly and Chicago Stamping plants by the end of the year.

The expansion comes as Detroit’s automakers look to recover from a dramatic plunge in sales, which fell to a 27-year low last year. But these new workers will probably not make as much as they would have in previous years.

Under union contracts signed in 2007, the U.S. automakers are able to pay newly-hired employees significantly less than their veteran factory workers. The contracts also allow automakers to give reduced health care and pension benefits to new hires.

Separately, General Motors says it intends to become the first major automaker to design and manufacture electric motors for cars in the United States - adding jobs in the process.

The first of GM’s electric motors will be used in the next generation of the company's rear-wheel-drive hybrid vehicles such as the Chevrolet Tahoe hybrid SUV beginning in 2013.


Filed under: Andrew Torgan • Economy • Housing Market
January 25th, 2010
06:45 PM ET

Financial Dispatch: Stocks inch higher

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Andrew Torgan
CNN Financial News Producer

Stocks on Wall Street managed some slight gains today as investors weighed worries about the bank sector, the likelihood of Fed Chairman Ben Bernanke being confirmed for a second term and a troubling report on the housing market.

The Dow added 23 points or 0.2%. The S&P 500 added 5 points or 0.5% and the Nasdaq also gained 5 points or 0.3%.

Stocks plunged last week after President Obama proposed new limits on banks and talk swirled that Bernanke's term may not be renewed. In three sessions, the Dow, S&P 500 and Nasdaq all slumped 5%.

But those worries were tempered today at the start of a busy week for economic and earnings news. This week brings a Fed meeting, the first reading on fourth-quarter GDP growth, the president's State of the Union address and profit reports from a slew of major companies – including DuPont, Johnson & Johnson, and Travelers.

First out of the gate with earnings this week is Apple, which reported another strong quarter after the closing bell on the back of its current product lineup, which includes iPhones, iPods and Macintosh computers.


Filed under: Andrew Torgan • Economy • Finance • Housing Market • Technology
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