WORLD> America
|
WORLD> America
|
|
Evidence piling up that worst of recession is over
(Agencies)
Updated: 2009-05-09 14:55
The Fed says unemployment will remain elevated into 2011. Economists say the job market may not get back to normal -- meaning a 5 percent unemployment rate -- until 2013.
Still, a string of reports out this week suggested the recession is finally starting to lose its bite and the economy is stabilizing. ? The number of newly laid-off workers filing applications for jobless benefits plunged to the lowest level in 14 weeks. ? Sales at many retailers fared better in April, with Wal-Mart Stores Inc. leading the way. ? Construction spending rose in March, the first increase after five straight months of declines. An index of pending home sales also ticked up. ? The US services sector contracted in April at a slower pace than the prior month. ? Government exams of the nation's biggest banks helped lift a cloud of uncertainty that has hung over the economy. Those "stress test" results -- a key administration effort to boost confidence in the financial system -- showed nine of the 19 biggest banks have enough capital to withstand a deeper recession. Ten must raise a total of $75 billion in new capital to withstand possible future losses. Taken altogether, the recent news provides "very clear signs that we are making progress toward reaching a bottom, which is the first step you need to accomplish before you can achieve a turnaround," said Ken Mayland, president of ClearView Economics. "A recovery is now in sight." However, the housing, credit and financial crises -- the worst since the 1930s -- have racked up a lot of damage, and it could take years to get back to normal. Since the recession began in December 2007, the economy has lost a net total of 5.7 million jobs. The 741,000 lost in January were the most since the fall of 1949. Job cuts have continued this week. Steelmaker Severstal International said it's idling plants in West Virginia and Ohio, resulting in 3,100 layoffs. Microsoft Corp. said it was starting thousands of the 5,000 job cuts it announced earlier this year and left the door open to even more. As the recession eats into sales and profits, companies have turned to other cost-cutting measures, too. Those including holding down workers' hours and freezing or cutting pay. The average work week in April stayed at 33.2 hours, matching the record low set in March. And workers' wages barely budged, meaning consumers will probably stay somewhat cautious in the months ahead. Average hourly earnings nudged up to $18.51, a 0.1 percent rise. Slower job losses across a number of industries -- along with 66,000 more federal jobs -- helped to temper the overall payroll reductions in April. The pickup in federal employment was mainly due to the hiring of 63,000 temporary Census workers. By fall, the Census Bureau expects to have hired 1.4 million workers. Stephen L. Buckner, a Census Bureau spokesman, said turnover and finding qualified applicants haven't been a problem, "with the economy the way that it is." Labor Secretary Hilda Solis, wouldn't speculate on the future pace of layoffs but warned that some of the jobs lost "may not come back." She urged jobseekers to get training and education to be contenders for work in growing industries, such as health care, which added nearly 17,000 jobs in April. Obama asked states and colleges to help jobless people pursue education and training without losing their unemployment benefits. States generally require people who collect unemployment to be actively looking for work, which can make it difficult to sign up for school or job training. Under Obama's plan, going to school would satisfy the requirement that they were seeking new employment. "We're still in the midst of a recession that was years in the making and will be months or even years in the unmaking," Obama said. But he added: "Step by step, we are making progress."
|
