Private-sector employment increased by 217,000 from January to February on a seasonally adjusted basis, according to the latest ADP National Employment Report released today. The estimated change of employment from December 2010 to January 2011 was revised up to 189,000 from the previously reported increase of 187,000. This month’s ADP National Employment Report suggests continued solid growth of nonfarm private employment early in 2011. The recent pattern of rising employment gains since the middle of last year was reinforced by today’s report, as the average gain from December through February (217,000) is well above the average gain over the prior six months (63,000).
The fears of a jobless recovery may be receding but the US economy has a long way to go before pre-recession employment levels are achieved. As we stated previously the economy needs to create over 200,000 jobs per month for 48 consecutive months to achieve pre-recession employment levels. The six month average of 63,000 is still well below the required rate of job creation for a robust recovery to occur. The Unemployment Rate still exceeds 9%.
The February report is encouraging because it points to an accelerating pace of job creation. The post Christmas season employment surge represents a 30,000 job gain over January’s strong report that triples the six month moving average. The service sector accounted for over 200,000 of the job gains. The manufacturing and goods producing sector combined to create 35,000 jobs. Construction continues to mirror the moribund housing market shedding an additional 9,000 jobs during the month. The construction industry has lost over 2.1 million jobs since its peak in 2008.
The robust recovery in the service sector is welcomed but sustainable economic growth can only be achieved by a robust turn around in the goods producing and manufacturing sectors. Service sector jobs offer lower wages, tend to be highly correlated to retail consumer spending and positions are often transient in nature. Small and Mid-Sized Enterprises (SME) is where the highest concentration of service jobs are created and the employment figures bear that out with SMEs accounting for over 204,000 jobs created during the month of February.
Large businesses added 13,000 jobs during the month of February. The balance sheets of large corporations are strong. The great recession provided large corporates an opportunity to rationalize their business franchise with layoffs, consolidations and prudent cost management. Benign inflation, global presence, outsourcing, low cost of capital and strong equity markets created ideal conditions for profitability and an improved capital structure. The balance sheets of large corporations are flush with $1 trillion in cash and it appears that the large corporates are deploying this capital resource into non-job creating initiatives.
The restructuring of the economy continues. The Federal stimulus program directed massive funds to support fiscally troubled state and local government budgets. The Federal Stimulus Program was a critical factor that help to stabilize local government workforce levels. The expiration of the Federal stimulus program is forcing state and local governments into draconian measures to balance budgets. Government employment levels are being dramatically pared back to maintain fiscal stability. Public service workers unions are under severe pressure to defend employment, compensation and benefits of workers in an increasingly conservative political climate that insists on fiscal conservatism and is highly adverse to any tax increase.
The elimination of government jobs, the expiration of unemployment funds coupled with rising interest rates, energy and commodity prices will drain significant buying power from the economy and create additional headwinds for the recovery.
The principal macroeconomic factors confronting the economy are the continued high unemployment rate, weakness in the housing market, tax policy and deepening fiscal crisis of state, local and federal governments. The Tea Party tax rebellion has returned congress to Republican control and will encourage the federal government to pursue fiscally conservative policies that will dramatically cut federal spending and taxes for the small businesses and the middle class. In the short term, spending cuts in federal programs will result in layoffs, and cuts in entitlement programs will remove purchasing power from the demand side of the market. It is believed that the tax cuts to businesses will provide the necessary incentive for SME’s to invest capital surpluses back into the company to stimulate job creation.
The growing uncertainty in the Middle East and North Africa is a significant political risk factor. The expansion of political instability in the Gulf Region particularly Iran, Egypt and Saudi Arabia; a protracted civil war in Libya or a reignited regional conflict involving Israel would have a dramatic impact on oil markets; sparking a rise in commodity prices and interest rates placing additional stress on economic recovery.
Political uncertainty tends to heighten risk aversion in credit markets. The financial rescue of banks with generous capital infusions and accommodating monetary policies from sovereign governments has buttressed the profitability and capital position of banks. Regulatory uncertainty of Basel III, Dodd-Frank, and the continued rationalization of the commercial banking system and continued concern about the quality of credit portfolios continue to curtail availability of credit for SME lending. Governments are encouraging banks to lend more aggressively but banks continue to exercise extreme caution in making loans to financially stressed and capital starved SMEs.
Highlights of the ADP Report for February include:
Private sector employment increased by 217,000
Employment in the service-providing sector rose 202,000
Employment in the goods-producing sector declined 15,000
Employment in the manufacturing sector declined 20,000
Construction employment declined 9,000
Large businesses with 500 or more workers declined 2,000
Medium-size businesses, defined as those with between 50 and 499 workers increased 24,000
Employment among small-size businesses with fewer than 50 workers, increased 21,000
Overview of Numbers
The 202,000 jobs created by the SME sectors represents over 90% of new job creation. Large businesses comprise approximately 20% of the private sector employment and continues to underperform SMEs in post recession job creation. The strong growth of service sector though welcomed continues to mask the under performance of the manufacturing sector. The 11 million manufacturing jobs comprise approximately 10% of the private sector US workforce. The 20 thousand jobs created during February accounted for 10% of new jobs. Considering the severely distressed condition and capacity utilization of the sector and the favorable conditions for export markets and cost of capital the job growth of the sector appears extremely weak. The US economy is still in search of a driver. The automotive manufacturers have returned to profitability due to global sales in Latin America and China with a large portion of the manufacturing done in local oversea markets.
The stock market continues to perform well. The Fed is optimistic that the QE2 initiative will allay bankers credit risk concerns and ease lending restrictions to SMEs. A projected GDP growth rate of 3% appears to be an achievable goal. The danger of a double dip recession is receding but severe geopolitical risk factors continue to keep the possibility alive.
Interest rates have been at historic lows for two years and will begin to notch upward as central bankers continue to manage growth with a mix of inflation and higher costs of capital. The stability of the euro and the EU’s sovereign debt crisis will remain a concern and put upward pressure on interest rates and the dollar.
As the price of commodities and food spikes higher the potential of civil unrest and political instability in emerging markets of Southeast Asia, Africa and Latin America grows. Some even suggest this instability may touch China.
The balance sheets of large corporate entities remain flush with cash. The availability of distressed assets and volatile markets will encourage corporate treasurers to put that capital to work to capitalize on emerging opportunities. The day of the lazy corporate balance sheet is over.
Solutions from Sum2
Credit Redi offers SMEs tools to manage financial health and improve corporate credit rating to attract and minimize the cost of capital. Credit Redi helps SMEs improve credit standing and demonstrate to bankers that you are a good credit risk.
For information on the construction and use of the ADP Report, please visit the methodology section of the ADP National Employment Report website.
You Tube Video: John Handy, Hard Work
Risk: unemployment, recession, recovery, SME, political
This is how the world ends
This is how the world ends
This is how the world ends
Not with a bang but a whimper
The Hallow Men TS Elliot
A few interesting news items recently passed without much notice. Two nuclear reactors located in the Northeast had to be brought offline due to operational failures. The Vermont Yankee reactor sprang a leak and had to be shut down. The other incident occurred at the thirty six year old Indian Point reactor located about twenty miles north of New York City. The cause of the problem at Indian Point was a transformer fire. Both reactors are owned and operated by Entergy and mirror similar problems at the Excelon operated Oyster Creek reactor located in south central New Jersey.
These incidents are endemic to aging nuclear power facilities. These plants came on line during the the 1970’s and are now approaching the half century mark of service. When these plants were commissioned it was believed they would have a shelf life of 40 years. As the expected useful life span of these facilities approach regulators routinely grant extensions to the operators. Operating these facilities past that point heighten potential risk factors. As nuclear reactors age, the stress on these complex systems and containment facilities raise risk factors heightening the potential of system failure that lead to catastrophic events.
Leaky plumbing at the Oyster Creek nuclear plant is the culprit in poisoning the Cohansey Aquifer with 180,000 gallons of tritium contaminated water. Regulators and environmental officials assert that the level of radio active isotopes in the water supply that serves South Jersey and parts of Philadelphia is well within acceptable levels for human consumption. I guess that all depends on your definition of human; but I and many others remain skeptical on the subject of drinking radioactive laced water.
The aging nuclear infrastructure of the United States is a growing cause for concern. The nuclear power industry was halted in its tracks in the 1980’s by a strong No Nukes environmental movement. At the time it was generally understood that the cost of catastrophic risk and the industries inability to solve the long term problem of disposal and management of nuclear waste turned the public against the industry.
The Three Mile Island accident in Pennsylvania and the disastrous meltdown at Chernobyl in the Russian Caucuses led to a moratorium on new plant construction in the United States leading to the actual abandonment of plant construction in the Washington and New York. It created a capital market crisis as the fear of defaults on WPPSS revenue bonds spread to cast long shadows on the entire Muni Bond market. The state of New York stepped in to purchase the facilities of Long Island Power in order to make bondholders of the closed facility whole with tax payer money. It was kind of like socialism for investors.
While most of the world has continued to build nuclear plants to address growing energy needs; the United States has not built a nuclear plant since the 1980’s and has lagged the world in using nuclear power to address energy needs. Sentiment on the desirability of nuclear power is beginning to change. The Pickens Plan, former VP Dick Cheney’s secret meetings to develop a national energy strategy, the Gulf Oil Spill, the need to reduce dependence on foreign oil and the growing acceptance that the burning of fossil fuels is slowly cooking the planet has placed nuclear power back on the table as a viable component of America’s energy portfolio.
China is committed to building 100 nuclear power plants to wean itself from its crippling dependence on coal. The United States is charging hard to keep up with its fast growing Asian competitor in a 21st Century nuclear power race. The aggressive pursuit of nuclear plant development will increase the power and control of corporate entities charged with their construction, management and on going administration. To accomplish a dramatic build-out in nuclear infrastructure large areas of land situated near a plentiful water supply will need to be secured. Environmental impacts, regulatory oversight and public transparency will be sacrificed at the alter of cost efficiency, expedience in implementation and security to protect the vulnerable facilities against the pervasive armies of terrorists that lurk in the shadows near every nuclear plant.
The controversy surrounding the collusion of government and business to exploit the Marcellus Shale natural gas vein is an instructive model of what we can expect from the stakeholders pursuing an aggressive campaign to develop Americas nuclear power infrastructure. The dismissal of regulatory controls, the eminent domain of corporate interests, the opaque wall that shrouds risks factors and hides the environmental degradation resulting from the practice of fracking and the sacrifice of watersheds and aquifers to the expeditious extraction of natural gas are some of the documented behaviors of a wanton corporate will imposed on the body politic. Tragically this near sighted perspective willfully sacrifices the sustainable ecology of communities to the sole purpose of the profitable extraction of resources to serve shareholders of private corporations. The nature of the nuclear beast will require that its interests be enforced by courts of law guided by extreme prejudice and protected by police battalions, state guard units and private security groups in the name of national security interests.
The recently discovered Stuxnet computer virus is an indication of how the stakes are being raised in the nuclear power shell game. The launch of a successful cyber attack on a nuclear facility anywhere in the world is a real game changer. Self deluded uber patriots act more like real pinheads if they believe that the destruction of Iran’s nuclear power capability is a harbinger for Middle East peace or enhances the security of either Israel or the United States. A nuclear event in Iran or North Korea are real game changers for the course of human history and the well being of humanity. A clandestine service that can take out Iranian nuclear reactors can also be deployed to take out a reactor that is twenty miles north of New York City. Or consider the consequences of a summer heat wave ravaging the citizens Philadelphia dying of thirst because the water supply is contaminated with radiation. The extent of civil unrest would be extreme overwhelming the local law enforcement and judicial capabilities. If these bleak scenarios come to pass, Americans will be pining away for the good old days when a quick feel up at the airport by a TSA gendarme is fondly recalled like a high school make out session. The pernicious yoke of marshal law under the nuclear challenged corporate security state will be incessant in practice and swift, sure and dire in its execution.
You Tube music video: No Nukes Concert 1979: Doobie Brothers Taking it to The Streets
Risk: democracy, energy policy, nuclear power, civil liberties
There is a large controversy concerning the BBC’s refusal to air an appeal by relief organizations trying to get aid to the suffering inhabitants of the Gaza Strip. We understand the BBC’s reasoning of trying to maintain its neutrality in the political morass of the Israeli / Palestinian war. But we also understand that the unending agony of the people who live in Gaza needs to be addressed.
We publish an appeal for devotions and aid from the Religious Society of Friends, Friends United Meeting (FUM) that operates a School in Ramallah in the West Bank.
Hope will never be silent. ~ Harvey Milk
Because “the job of a citizen is to keep his mouth open.” ~ Gunter Grass
The following message from Joyce Ajlouny, Director of the Ramallah Friends School, came to us from FUM today. It gives details about what is actually happening on the ground in the Gaza strip that we have not encountered anywhere else.
We are grieved at the violence that has permeated Israeli-Palestinian relations for so many years, and are horrified at this most recent chapter. Let us all pray for peace in this region and continue to work for peace there and around the world.
Christopher Sammond, general secretary
Ernestine Buscemi, clerk
From: C D Williams
Sent: Tue, 30 Dec 2008 8:18 am
Subject: [FUM Devotions] Prayers for Palestinians in Gaza
I hope this finds you well and ready to receive the New Year. Let us hope 2009 will be the bearer of good news for all!
I know that you’ve been hearing the horrific news from Gaza. We are doing fine here on the West Bank – at least physically. Our hands are tied as well feel so helpless seeing our people suffer. It is a blood bath in Gaza – a real massacre against a people who have been living under siege for months on end. Over 360 people are dead so far (many are civilians including children) and over 1700 injured. The humanitarian conditions were catastrophic even before Israel waged its present offensive. I just spoke to a friend in Gaza who said that there is no electricity, no water, no food, no candles, no medical supplies, no oven gas… where do we start. She also said that there is hardly a house left with windows intact and families are scraping plastic sheets to shut their windows to protect themselves from the cold and that hospitals are overflowing with the injured lying in the hallways. Gaza is the home of around 1.5 million.
I am working on a humanitarian appeal targeting our parents. We hope to raise some funds and send to Gaza soon.. From our families to theirs. I know we can at least succeed in this act of solidarity, knowing that the needs are too grave for our efforts to make a huge difference. We are thinking of going through reputable humanitarian fund in Gaza and ask them to prepare care packages for some of the neediest families. The question is the availability of goods… I am not sure what is available anymore since goods have been prevented from entering for a few months now. The market is probably depleted – nonetheless we are trying.
Anyhow, this is a short note, to ask for your prayers that the Israeli leadership will find it in their hearts to stop this act of severe aggression on an already impoverished and imprisoned population. Pray for justice and peace in Palestine and all other war-stricken regions around the globe.
Blessings to all,
PS – The school is still on break until the 10th but I am working along with the school engineers on our construction projects – there is so much going on ( I feel I am living on a construction site). With all of what is going on the being preoccupied with work is a welcomed distraction.
A short Eyewitness Article from The Guardian can be seen at
You Tube Video: Randy Weston: Blue Moses
Risk: ambililence, silence, turning a blind eye
Israel is marking its 60th anniversary as a country today. Established by the UN Mandate for the
Partition of Palestine in 1947, Israel has been embroiled in a constant state of conflict with Palestinian Arabs and the neighboring Arab and Persian nation states since its inception. The founding of Israel was seen as one of the better fruits borne from the trauma of World War II. Part blessing, part curse Israel’s establishment in Palestine is small consolation for the nightmare of the Jewish Holocaust and desire to exorcise the stain of Nazism from the collective soul of modern civilization.Unfortunately, Nazism as a political expression of a modern civilized state is a telling oxymoron that continues to play itself out in today’s world as the hope and promise of tolerance and the uncertainty of secular democracies battle the intolerance of fundamentalism and theocratic certainty. Israel’s founding provided hope that the pedagogy of the oppressed would not be lost on hardened hearts of civilized nations. Israel is living evidence that world powers could be trusted to rectify and eradicate problems through decisive action. Some might say a modern day metaphor of Solomon’s wisdom. Israel’s founding was a moral hope of the global community and evidence that out of horror and hate something good, just and enduring could be borne. But history and the geopolitical realities of scarcity, the complex web of political interests and the resourcefulness of the power elites to protect their privileges continues to conspire against a right and just course of action to follow a roadmap to peace in Palestine.
More of Solomon’s wisdom is called for today. Solomon’s judgment precluded the use of the sword. Today we cannot distinguish plaintiffs from defendants. Both sides are victimized by their own intractability. The sword is the only way. The blessed baby is bleeding to death.
We pray that Israelis and Palestinians will beat their spears into pruning hooks to mend and stitch the shroud of permanent and lasting peace.
You Tube Video: Theme from Exodus
Risk: Political, War, Peace, Religion, Poverty, Death, Life
Jimmy Carter and Bill Clinton are a study in contrast. Both are big risk takers. Each motivated by different agendas and each pursuing radically different goals. Today Jimmy Carter.
I’ll never forget the time I saw Jimmy Carter in the flesh. It was a Friday afternoon, late August in NYC and Roselyn and Jimmy were strolling through the heart of the garment district on 7th Ave about 3 blocks south of Times Square. It was past 5:00PM and the sidewalks were absolutely deserted save the 5 or 6 common looking street folk eagerly chatting away with the Carters. Two Secret Service agents trailed the posse looking totally at ease and not in the least concerned about any potential threat to the safety and well being of their protective charges.
The same could be said for the Carters. From across the street I could see the aura of Jimmy’s beaming smile and Roselyn’s affability. As the couple strolled arm in arm the desire of the surrounding people to engage and to be in the couple’s presence and the Carters joy of the moment created a floating cloud of positive karma. Jimmy and Roselyn are the living embodiment of good positive karma.
Jimmy and Roselyn have been busy educating, building, promoting and performing good works to alleviate suffering, promote democracy and witness for peace and justice all over the world. He is an inspiration and a child of God.
We cheer Mr. Carter’s latest of many initiatives to end the conflict between Israel and Palestine. He is a tireless and consistent worker to repair the breach. We join in hopeful expectation and an optimism borne solely by faith that his work will begin a process of reconciliation for a region where recrimination is drowning all parties in a sea of blood.
Mr. Carter’s efforts have been scoffed, condemned and shunned by involved parties. His mission is fraught with much risk to his reputation, his legacy and his well being. But Mr. Carter knows the greater risk lies in the continuation and potentially broadening of the Israel / Palestine conflict. I believe he knows that the personal risk he is assuming is inconsequential to the risk of doing nothing and witnessing the region self immolate in the continued flames of war.
God bless you Mr. Carter. You take personal risk to build peace. By your actions you encourage dialog and reconciliation. You are a repairer of the breach.
You Tube Video: Duke Ellington and Mahalia Jackson, Come Sunday
Risk: Personal, Political, War, Religion