June 2010 Unemployment 125,000 Shed

The US continues to face challenges in its labor markets.

125,000 jobs were cut. While the private sector added a less than robust 83,000 jobs. Consensus estimate were for the creation of 110,000 jobs in the private sector.

Over 652,000 people left the labor force.

Average work week hours also declined, from 34.2 to 34.1 hours worked.

The economy continues to experience significant headwinds with cuts from the delayed decision of extended unemployment benefits, to the possible future austerity measures that the US may follow the rest of the world. Time will tell if there will be another jobs bill to stimulus the sluggish recovery.

2009 Unemployment Duration in the United States by State

From the NY Times, unemployment duration in the United States by state. Still a very difficult climate for hiring in the United States.

Italy Facing Persistent Unemployment If Recovery

Bank of Italy governor Mario Draghi warned in a key speech Monday that unemployment in the country is likely to stay persistently high as economic recovery remains slow.

He said the financial crisis had weighed disproportionately on young people. Unemployment in Italy, for people between the ages of 20 and 34, reached an average of 13% in 2009, he said.

The national rate is 8.6% in March.

Starting-level salaries haven't changed much in 15 years, he added.

"A slow recovery increases the probability of persistent unemployment", Draghi said. "This condition, especially at the beginning of a professional career, tends to be associated with permanently lower salaries in the future".

Source: Dow Jones Newswire

RBS analyst Bob Janjuah states his views

RBS analyst Bob Janjuah was quite temped in his views of the global growth story.

Bob Janjuah states that a massive turnaround in corporate behaviour in leverage, capex, investment, hiring and spending binge is extremely unlike for now and for the rest of this year.

This is a pretty honest assessment after all the rose colored glasses calls of a buoy hiring landscape for the staffing firms. However, premenant placement has barely budged from historical levels, and consumers continue to be selective on their purchasing behavior.

The U.S. also revised its GDP downwards to 3.0% rather than bullish estimates from firms such as Goldman Sachs of 3.7%. Besides that unemployment claims also missed estimates.

May 15 2010 Unemployment Survey Week

With today's release of the unemployment claims for survey week May 15, 2010, claims were above consensus.

471,000 vs. expectations of 440,000.
Continuing claims were also above expectations 4,625,000 vs. expectations of 4,610,000.

Unfortunately, unemployment claims will continue to rise. With the Census staffing most probable ending June 30, 2010 expect a dramatic uptick in weekly claims, and continuing claims.

Besides that business confidence, and continued worries in the Euro Zone, and the lack of collective reasoning in Europe may possibly spread and cause significant slowdowns across major regions of the world.

I have touched on this mainly on Robert Half International's largest segment is the United States , however other staffing groups have also seen very minimal uptick in hiring compared to historical rebounds in the economy. I remain very cautious, and a decline in the economy is more than probable at this point.

Source: DOL

http://www.dol.gov/opa/media/press/eta/ui/eta20100682.htm

Employment Trend Index rises - April 2010

The recovery in the labor markets is broadening out, according to a report released Monday by the Conference Board.

The board said that its April employment trends index increased 0.9% to 94.7, from a revised 93.9 in March, first reported as 94.4. The index has risen for eight consecutive months and is up 7.1% from a year ago.

The ETI report follows last Friday's government employment release that showed nonfarm payrolls increased 290,000 last month.

Despite that strong job gain, the board remains cautious about the jobs outlook.

"The employment trends index continued to rise in April, but its rate of growth has slowed in recent months," said Gad Levanon, associate director.

Source: Dow Jones Newswire

Robert Half RHI Q1 2010 Earnings

Robert Half International (RHI) reported Q1 2010 earnings. Robert Half International reportedly missed earnings of .05 vs. analyst estimates of .06.

Revenue was also light of estimates. Q1 2010 revenue $737.2M vs. analyst consensus of $750.76M. Robert Half International although it sustained through the down draft of the financial crisis continues to face slack demand in all components of the company.

When valuations have risen as fast as they have, and demand has been lukewarm from the cyclical bottom, these temporary, and staffing firms continue to produce fairly weak margins.

I continue to see this sector as overvalued relative to the S&P's earnings.