WASHINGTON – Manufacturing job gains in the Midwest helped lower the nation's economic stress in April to its lowest point in five months, according to The Associated Press' monthly analysis of conditions around the country.
Contributing to the improvement were lower foreclosure rates in two states with beaten-down housing markets: California and Florida.
Economic stress levels dipped in every state except Louisiana and Nevada in April. They also declined in more than 90 percent of the nation's 3,141 counties, according to AP's Economic Stress Index.
Only 42 percent of counties were deemed stressed in April, compared with half in March. The AP's index found the average county's Stress score in April was 10.6, down from 11.5 in March. It was the lowest score since November's rating of 10.2.
The index calculates a score for each county and state from 1 to 100 based on unemployment, foreclosure and bankruptcy rates. A higher score indicates more stress. Under a rough rule of thumb, a county is considered stressed when its score exceeds 11.
A separate report Tuesday showed job openings jumped in April to the highest level in 16 months. It was a sign private employers may be ready to ramp up hiring despite a report Friday suggesting they lacked enough confidence in the recovery to start adding many workers in May.
The number of jobs advertised at the end of April rose to 3.1 million from 2.8 million in March, the Labor Department said. That's the most openings since December 2008. Private employers accounted for the entire net gain.
Job openings have risen since bottoming out at 2.3 million in July. Still, they remain far below pre-recession levels.
The competition for jobs remains tough. Five unemployed people, on average, competed for each job opening in April. That's down from 5.4 in the previous month. But it's well above pre-recession levels of 1.8 jobless workers per opening.
On Monday night, Federal Reserve Chairman Ben Bernanke raised hopes for the economy when he expressed doubt about the likelihood of a "double dip" recession. Bernanke did caution, though, that the recovery "won't feel terrific."
States with manufacturing bases like Wisconsin are enjoying a slow but steady recovery. Of the roughly 30,000 jobs created in Wisconsin since December, about 10,000 are in manufacturing, said John Koskinen, the state's chief economist.
"The mood is something like, 'Whew,'" Koskinen said. "After sweating the downturn and the decline in employment for so long, to see this turnaround is such a relief."
Wisconsin (10.48), Missouri (10.62) and South Carolina (11.78) saw the most month-over-month economic improvement from March to April.
North Dakota (4.53) again led the nation in economic health, as it has since the AP began publishing the Stress Index in May 2009. It was followed by South Dakota (5.2), Nebraska (6.11), Vermont (7.28) and Louisiana (7.23).
Nevada remained the most economically stressed state. It suffered the biggest increases in foreclosures and unemployment in April. And it absorbed an increase in bankruptcy filings. Nevada had a Stress score of 21.97. It was followed by Michigan (17.06), California (16.56), Florida (15.33) and Arizona (14.71).
Louisiana was the only state besides Nevada to suffer higher stress from March to April. Its unemployment rate was unchanged. But it saw small upticks in foreclosure and bankruptcy rates.
Bankruptcy rates held steady for most of the nation, though they rose month-to-month in several Western states.
Mark Zandi, chief economist for Moody's Analytics, said a tracking tool his forecasting firm uses is also showing an upturn: Nearly two-thirds of metro areas are flashing signs of growth.
"That's the best showing since mid-2008," Zandi said.
But he and other analysts cautioned that the recovery is likely to remain sub-par compared with other expansions after deep recessions.
The government reported Friday that temporary government hiring for the census drove nearly all the U.S. job market's gains last month — a sign that private employers have yet to start hiring aggressively.
The unemployment rate could rise in coming months from the current 9.7 percent as more people enter the labor force. Zandi said he didn't expect the country to recoup the more than 8 million jobs lost during the recession until 2013.
"Given the severity of the job losses during the recession, it will take longer to get back to where we started," Zandi said. "The job market is getting better, but it is not getting better fast enough to make us feel good about what is happening."
David Wyss, chief economist at Standard & Poor's in New York, predicted the economy, as measured by the gross domestic product, will grow 3.3 percent this year. That would be a big improvement from last year's 2.4 percent decline. But it would be only about half-speed compared with other recoveries after severe downturns.
Nevada, the most stressed state, is still hung over from the excesses of the mid-decade real estate boom. The state has a glut of about 10,000 homes. An additional 5,000 could be headed for foreclosure, said Mary Riddel, an economist at the University of Nevada, Las Vegas.
Tourism isn't expected to pick up until next year, Riddel said. The construction industry likely won't come back for five more years. And more jobs will be shed during the rest of the year, she said.
Vermont, North Dakota, Minnesota (9.15) and South Carolina have seen the biggest improvement in economic conditions for the year. Nevada, Idaho (12.02), New Mexico (9.57) and Mississippi (12.09) have fared the worst.
Counties of at least 25,000 residents that were the most economically stressed in April were Imperial County, Calif. (32.03); Lyon County, Nev. (28.16); Yuma County, Ariz.(26.4 ); Merced County, Calif. (26.23); and Sutter County, Calif. (25.22).
The economically healthiest were Ward County, N.D. (3.83); Brookings County, S.D. (3.9); Ellis County, Kan. (4.08); Burleigh County, N.D. (4.17); and Ford County, Kan. (4.18).
WASHINGTON (Reuters) –
Senate Democratic leaders on Tuesday proposed an economic package that would extend benefits for the long-term unemployed, renew business tax breaks and soften a proposed tax on fund managers profits.
The far-reaching plan, which Democrats hope will help cut into the 9.7 percent unemployment rate, extends payments for hundreds of thousands of unemployed Americans whose benefits lapsed at the end of May. To help pay for the bill, it would raise taxes on investment fund managers, but at a lower level than legislation approved by the House of Representatives.
"With so many Americans out of work, our country needs Congress to enact this legislation," Senate Finance Committee Chairman Max Baucus said in introducing the bill. "This bill continues valuable tax incentives to families and businesses that will help them in these difficult economic times."
The bill also would raise the oil trust fund tax to 41 cents per barrel from the current 8 cents per barrel.
The bill would restore funding to states for six months to help them pay for their Medicaid health program for the poor and extends expired business tax breaks, such as the research and development credit.
Under an $80 billion jobs bill passed by the House of Representatives last month, 75 percent of an investment fund manager's income would by 2013 be taxed as ordinary income rates, about 35 percent, compared with the current 15 percent capital gains tax treatment. The Senate bill would eventually tax 65 percent of profits at the higher ordinary income tax rate, with a break given to longer term investments.
Fund managers in private equity, real estate and the venture capital industry now pay capital gains rates on much of their profits.
(Reporting by Kim Dixon and Donna Smith; Editing by Eric Beech)
GENEVA – Swiss power grid supplier ABB Ltd has agreed to buy Britain's Chloride Group PLC, potentially setting up a bidding war with rejected suitor Emerson Electric Co.
ABB, the world's biggest supplier of power grids, said Tuesday it has agreed an 864 million pound ($1.25 billion) cash deal with London-based Chloride.
Chloride had rejected a 723 million pounds ($1.1 billion) preliminary offer from St. Louis-based Emerson in April as too low.
Under the ABB-Chloride deal, Chloride investors will receive 325 pence per share in cash — a 56 percent premium to the British company's closing price the day before Emerson made its approach.
The acquisition of Chloride, which provides backup power supply systems, is subject to regulatory approval.
"The combination of Chloride's strong position in the fast-growing medium- to high-power UPS business with ABB's global reach and complementary power and automation offering provides significant growth opportunities for both," said ABB's CEO Joe Hogan.
Analysts welcomed the announcement as an opportunity for ABB to improve its position in the market for uninterruptible power supply systems. But Helvea's Alessandro Migliorini noted the high price ABB will pay for Chloride, which trumps an earlier offer of 275 pence per share made by St. Louis-based Emerson Electric Co.
ABB shares closed up 0.21 percent at 19.26 Swiss francs ($16.6) on the Zurich exchange.