US unemployment and jobs figures for January are out tonight and will remind everyone just how big the US slowdown really is.
Analysts see over 500,000 jobs having been lost last month, pushing the unemployment rate up from 7.2% to 7.5%. That would be the highest level since 1993. But the real rate of unemployment will rise above 14% as more US workers lose hours and days and get caught up in a process known as “involuntary part-time work.”
In fact the unemployment numbers could be worse, judging by an unexpected surge in in the number of first time jobless claims last week which rose to 626,000 last Saturday. The US Labor Department said that figure was up from a revised 591,000 in the previous week and the highest level since the last week of October 1982, when jobless claims reached 637,000.
US retailers are shedding jobs and closing: a New York-based luxury store called Fortunoff closed its doors last week and filed for bankruptcy for the second time in a year.
That’s not hard to understand after the January retail sales figures from the country’s major chains. Around 100 chains reported same store sales collectively: Wal-Mart again stood out with a 2.1% rise in sales.
But its rival Target reported a 3.3% fall in same-store sales. JC Penny, the department store chain, saw same-store sales plunge more than 16% and Macy’s saw its sales fall 4.5%. The Gap had a 23% drop as clothing retailers were hit hard. Saks, the luxury chain, saw sales tumble 23.7%.
As sales fall, so do orders from retailers to manufacturers and importers, so it’s no surprise US factory demand is falling. But figures out overnight showed a larger-than-forecast 3.9% fall in December, the fifth monthly decline in a row. That was less than November’s steep 6.5% plunge, but the statistics have never recorded falls for five consecutive months.
All this means bad news for US workers. Some economists persist with the belief that the market is about to “bottom out” and then a new round of losses start and the weekly claims surge again.
No part of the US has been spared: a scattered few are still doing well for local reasons, but detailed figures for December from the US Labor Department show just how widespread the job losses are.
More insidiously, the Department reported that unemployment rose across 98% of the US in December.
The report shows that the Californian town of El Centro, on the Mexican border, had the highest rate of unemployment at 22.6%. The town is reliant on agricultural employment, which fluctuates with the growing and harvesting seasons.
The lowest was in Morgantown, West Virginia with 2.7%. It’s home to West Virginia University, the town’s largest employer. The University also has a hospital and pharmaceutical manufacturing businesses, which add to local jobs.
The Labor Department said that of the 49 metropolitan areas with a population of at least 1 million, Detroit had the largest unemployment rate, at 10.6%, followed by San Bernadino, Calif, with 10.1%. Detroit’s high level is due to the car downturn, and the sub-prime mess and housing bust has seen jobless number soar in San Bernadino.
Oklahoma City had the lowest unemployment rate of large metropolitan regions, at 4.6% (thanks to energy), followed by Washington at 4.7% (government, which never seems to slacken, does it?).