Monday, November 30, 2009

Economy still too weak to create jobs

"The recent economic data have been consistent with our view that the economy is recovering, but at a distinctly subpar pace," wrote Jan Hatzius, chief economist for Goldman Sachs, in a note to clients. "Growth looks too sluggish to lower the 10%+ unemployment rate to a meaningful degree anytime soon."

Ultimately, however, it's the economy's fundamental strength that matters, not any particular number. Most economists -- in the private sector and at the Federal Reserve - continue to believe in a disappointingly sluggish recovery that will only slowly bring the unemployment rate down.

Source : Marketwatch

Monday, November 23, 2009

Unemployment compensation tax skyrocketing

Unemployment compensation tax has not been a widely discussed issued among the rising unemployment rate. States in the US are having difficulties paying unemployment claims due to the significant rise in unemployment. States have to resort to bumping up compensation tax such as an example with Florida, which has to increase unemployment tax by 12x from $8.40 for every employee to $100.30.

There are 33 states which will increase their compensation taxes next year. This will make small businesses which continue to be cautious with regards to credit, and expansion will now find hiring or retaining employees more expensive. Although contract and temporary workers may see a slight uptick, these positions will likely be mute to the unemployment rate, and claims will continue to be at elevated levels. Without sustained job creation and longer work hours for current employees, these temporary positions will likely see very minimal increases. Hence, why I've been very cautious with regards to investing in these employment services stocks.

Friday, November 6, 2009

Unemployment rate hits 10.2% vs. 9.9% expectation OCT 09

Nonfarm payrolls dropped by a seasonally adjusted 190,000 in October, bringing to total number of jobs lost in the recession to 7.3 million in the United States.
5.6 million had been out of work longer than six months, representing a record 35.6% of the unemployed.

The employment-population ratio fell from 58.8% to 58.5%.

Discouraged workers and those forced to work part-time, rose to 17.5%

Tuesday, November 3, 2009

Administaff ASF 3Q 2009 Earnings

For the third quarter 2009, the company reported net income of $5.8 million, or $0.23 earnings per diluted share. For the nine months ended September 30, 2009, the company reported net income of $19.4 million and earnings per diluted share of $0.77


Administaff beat EPS by .01, while revenues were light of consensus. Administaff is in a bad segment of the economy. With credit continued to be constrained and health costs continues to pressure employers, Administaff will have to pray that the economy can right itself in a positive direction.

I remain cautious on the business services sector till there is a defined upturn in employment demand.

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