Citigroup Cut More Jobs, Raise Credit Card Rates
Citigroup has said it will shed at least another 10,000 jobs in its investment bank and other divisions throughout the world, according to the Wall St Journal.
Citigroup announced last month it cut 11,000 jobs in the third quarter, bringing the total number of job cuts in 2008 to 23,000 already.
Citigroup aims to shrink its workforce to about 290,000 employees by next year from 352,000 as of Sept 30, the WSJ said.
The paper also reported that Citigroup is notifying some credit card customers that their interest rates are being raised by an average of three percentage points, despite falling base rates.
US Jobs Data Getting Worse
Just a week after saying that US unemployment was at a 14-year high of 6.5%, the US has posted more poor jobs data today.
US initial jobless claims surprisingly jumped to a 7-year high of 516K during the week ended November 8. This is the number of Americans filing new claims for state unemployment insurance.
In addition continuing jobless claims for the week ended November 1 rocketed to the highest reading since December 1982.
The figures suggest that the US labour markets are continuing to deteriorate at a rapid rate, and unemployment rate could be climbing much higher.
Looking at a chart of continuing claims versus the unemployment rate going back to 1970, it's clear that the figures used to be significantly more correlated. However, changes to the methodology used by the Bureau of Labor Statistics (BLS) to calculate the unemployment rate since 1994 have weakened the link.
See here where the orange line is % unemployed. It is also interesting how unemployment peaks and troughs seem to cycle at roughly 10-year intervals.
US Jobs Data Awful; Over 10M People Unemployed
US unemployment shot to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, stark proof the economy is almost certainly in a recession.
The figures are even gloomier than expected. Analysts had predicted a rise of 220,000 to 6.3%.
The new snapshot, released Friday by the Labor Department, showed the crucial jobs market deteriorating at an alarmingly rapid pace.
Unemployment is now at it's highest level since March 1994, surpassing the high seen after the last recession in 2001.
The report also included revisions to the August and September reports, and they don't make for pretty reading. Employers cut 127,000 positions in August, its says, compared with 73,000 previously reported. And a whopping 284,000 jobs were axed in September, compared with the 159,000 jobs first reported.
So far this year, a staggering 1.2 million US jobs have disappeared. Over half of the decrease coming in the past three months alone.
Over 10 million people are now unemployed in the US, an increase of 2.8 million over the past year.
Welcome to the hot seat Mr. President.
Forecast for U.S. workers: Gloom - "Slow-Motion Recession"
(Herald Tribune) -- As automakers dropped their latest batch of awful sales numbers on the market on Tuesday, reinforcing the gloom spreading across the economy, the troubles confronting American workers seemed to intensify.
Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers. Tighter lending standards imposed by banks in the wake of huge mortgage losses have made it hard for many Americans to secure credit — the lifeblood of expansion in recent years — crimping the appetite of consumers, whose spending amounts to 70 percent of the economy.
Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.
Now, add to that unsavory mix the word from automakers that sales plunged in June — by 28 percent for Ford, 21 percent for Toyota and 18 percent for General Motors — a sharp sign that consumers are pulling back, making manufacturers more likely to cut production and impose more layoffs. Until recently, the weak labor market has been marked more by the reluctance of employers to create new jobs than by mass layoffs.
Among economists, the sense is broadening that the troubles dogging the economy will be stubborn, leaving in place an uncomfortable combination of tight credit and scant job opportunities perhaps well into next year.
"It's a slow-motion recession," said Ethan Harris, chief United States economist for Lehman Brothers. "In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we're not getting the classic two or three negative quarters. Instead, we're expecting two years of sub-par growth. Growth that's not enough to generate jobs. It's kind of a chronic rather than an acute pain."
Read the rest of the story here
Job seekers at a New York job fair recently.
