Market Talk

Amid all the hype that the recession’s over and the labor market’s on the mend, we get a sobering report today from the Labor Department showing the jobs market still has a long road to recovery. From Dow Jones’ Meena Thiruvengadam:

WASHINGTON -(Dow Jones)- The number of U.S. workers laid off in February slid to its lowest level in more than a year, but job openings for the unemployed remained scarce.

For each job available at February’s end, there were 5.5 unemployed people, a report released by the Labor Department Tuesday shows.

The U.S. had 2.7 million job openings at the end of February, a slight decrease from January but higher than every other month since February 2009.

There has been a “decisive upturn” in the number of job openings in the U.S. since July, said Raymond Stone, one of the founders of Stone & McCarthy Research Associates. Hiring, however, has yet to pick up.

Stone described February’s data as “generally upbeat,” but noted that data have been “very, very weak.”

When the recession began in December 2007, there were 1.8 unemployed people per job opening. The figure rose to a high of 6.2 in 2009, the Labor Department’s data show.

Employers in February made four million hires. About 1.85 million people quit jobs in February while 1.82 million were laid off, fired or otherwise let go.

“We are moving in the right direction,” Stone said.

The fact that there are more than six unemployed people vying for every job opening doesn’t bode well for all those long-term unemployed folks. And remember there are 6.5 million people in this country considered long-term unemployed – out of work at least 27 weeks – which translates to 44% of all unemployment, up from 41% in February and 24.6% a year ago.

Don’t let anyone fool you – the jobs market has a long path to recovery.

- Barry Ritholtz breaks down the pros and cons of today’s jobs report.

- It’s going to be hard to climb out of long-term jobless pit. Average length of time jobless folks have been out of work hit record-high 31.2 weeks last month. And the longer they stay unemployed “the worse their chances of finding work become – either because their skills become stale and dated, or because they are stigmatized by the giant hole in their resumes,” NYT’s Economix says.

- Job report’s a step in right direction, but doesn’t represent a “robust return to full employment,” Mark Thoma says. “My expectation is that job growth will be frustratingly slow, but just positive enough to keep our hopes alive.”

- Spike in involuntary part-timers puts damper on jobs report. Number of workers only able to find part-time jobs (or have had their hours cut for economic reasons) “increased sharply to 9.1 million in March,” Calculated Risk notes, from just under 8.8 million in February and 8.3 million in January.

- “What does seem clear is that the pace of net job creation is still well below the levels required to appreciably improve the unemployment rate or to make a sizable step toward regaining the eight million-plus jobs lost since the beginning of the recession,” David Altig writes at Atlanta Fed’s macroblog.

- “All in all, the [jobs] report appears to be of the ‘ugly Goldilocks’ sort – not too hot and not too cold, but just ugly enough under the surface to keep the liquidity pumps fully primed,” Pragmatic Capitalist says.

- Don’t count on lots of free TV on the iPad, Peter Kafka reports. Disney’s (DIS) ABC is the only one of the four major TV networks putting a decent amount of programming on the iPad in time for tomorrow’s launch.

- ISuppli expects Apple (AAPL) to ship 7.1M iPads this year, 14.4M in 2011 and 20.1M in 2012. “Suffice it to say, these scenarios are far more bullish than the ones we’ve heard to date,” Digital Daily blogger John Paczkowski says. “Which is ironic given that iSuppli describes them as ‘conservative.’”

- As sweet as the iPad looks, some question the device’s true purpose and whether it’s worth the price.

- Old media’s expecting too much from iPad, MarketWatch’s John Dvorak says.

- Hulu not being shy about broadcasting the fact that it’s profitable. “Even if the number isn’t huge, a profit is well worth bragging about, because I can’t think of another Web video company that has claimed on so far,” including YouTube, MediaMemo blogger Peter Kafka says.

- Capital rules alone won’t keep banks honest. “The better solution is the ‘dumber’ one: avoid having banks that are too big (or too complex) to fail in the first place,” Baseline Scenario bloggers Simon Johnson and James Kwak say.

- Naked Capitalism blogger Yves Smith rips Jamie Dimon’s “self-serving” defense of big financial institutions. “One has to wonder whether anyone in a position of influence really believes what he is selling,” she says.

- “Businesses have dramatically tempered the rate of firing but still seem reluctant to aggressively add to their payrolls,” says Miller Tabak’s Peter Boockvar. “That process will seem more gradual in nature assuming the economy can sustain its healing and recovery in the face of reduced government stimulus and the growing likelihood of higher market interest rates.”

- Felix Salmon discusses the economics of Netflix (NFLX).

- “The Fed has a big problem. It acts in secret. That makes it an odd duck in a democracy,” Robert Reich says. “As long as it’s merely setting interest rates, its secrecy and political independence can be justified. But once it departs from that role and begins putting billions of dollars of taxpayer money at risk — choosing winners and losers in the capitalist system — its legitimacy is questionable.”

- Jeff Miller offers his March employment preview. Following the strong ISM manufacturing report, he estimates zero net job growth before factoring in the temporary census jobs, translating into a monthly gain of 130,000. That’s less than the 200,000 gain economists expect.

- 90% of stocks in S&P 500 are trading above their 50-day moving averages. “This is at the top end of the indicator’s range over the last year,” Bespoke says.

- Hedge fund manager pay soared last year. The top 25 earned a collective $25.3B. “We bet on the country’s revival,” says top-ranked David Tepper, who earned $4 billion. “Those who keep their heads while others are panicking usually do well.”

- Give the good ol’ microwave some respect.

- Good timing for jobless claims to post biggest weekly decline since last summer, James Picerno writes at The Capital Spectator. Drop comes on the heels of two consecutive weekly increases, which prompted fears that the declining trend since March may’ve run its course.

- Even amid the good jobless claims data, keep in mind the pace of firings has diminished, but hiring still seems to be on hold, Miller Tabak’s Peter Boockvar says.

- Financial reform chatter is getting tougher. Larry Summers is the latest to chime in. “We’re certainly emphasizing regulating the bankers now, not supporting the kind of irresponsible growth that we saw historically,” he says. Simon Johnson weighs in.

- Is Google stalling on its “new approach” to China? It’s been a month and Google still censors its search results. “Is the moral high ground the company claimed a month ago proving just a bit too high?” Digital Daily blogger John Paczkowski ponders.

- S&P 500, which firmly traded in overbought territory for months, not finds itself in oversold territory, where it’s been since mid-January, Bespoke Investment Group says.

- If treasury yields break to the upside alongside corporate bond yields, “there is a distinct possibility…that there may be no places to hide in 2010 other than perhaps the much despised US dollar,” says Mike Shedlock, an investment advisor for Sitka Pacific. “Risk is very high, and rising.”

- Dell’s latest deal, acquiring Kace Networks, looks like a “savvy” move.

- Blogs rip Google for privacy concerns surrounding Buzz.

- Furloughs, wage freezes continue at USA Today. “We will evaluate business conditions on a quarterly basis and institute a fair and equitable compensation increase plan as soon as conditions permit,” Gannett Blogger Jim Hopkins reports.

- About a quarter of the 8.4M jobs eliminated since recession began won’t be coming back, according to economists polled in WSJ’s latest survey.

So NY Fed claims then-president Tim Geithner had nothing to do with decisions to limit AIG disclosures in 2008. Should make for an interesting congressional testimony later this month.

A dead-cat bounce for jobs? “It is likely that many companies cut back too much, particularly last winter, and are approaching a time when they will have to start hiring to meet even a low level of demand,” NYT’s Floyd Norris says.

Corporate insiders continue to heavily sell their own shares. “Much like Main Street, corporate insiders aren’t feeling or seeing the impacts of the recovery that have been so widely reported,” the Pragmatic Capitalist says. “This is one more sign that leaves us skeptical of the new secular bull market theory.”

Marginal new-high pattern for stocks may last for some time “followed by abrupt and often steep losses virtually out of nowhere,” John Hussman says. “Given this context, the next few months are likely to be extremely important.”

AOL’s “corporate slim-down” enters its next phase. MediaMemo blogger Peter Kafka says AOL is firing more than 1,000 employees.

Friday’s weak jobs report adds fuel to pessmists’ fire, Paul Krugman says.

Google’s lack of customer support for Nexus One needs to be addressed.

Hard to ignore rising commodity prices.

The never-ending Bank of America/Merrill Lynch drama continues. SEC’s seeking permission to add new charges against BofA for failing to disclose Merrill Lynch’s “extraordinary losses” in time for shareholder vote on its takeover.

Obama’s considering levying a fee on banks to recoup taxpayer funds spent to rescue the financial sector and auto companies.

The storms have passed, but a cloudy forecast remains for labor market.

Better-than-expected initial jobless claims data this morning leave bulls and bears split on this slow-motion labor market recovery.

The number of workers filing for jobless benefits fell yet again, marking another positive sign for the labor market. Claims fell 33,000 to 521,000, the lowest level since early January. Economists expected claims to drop to 540,000.

Nevertheless, don’t get too upbeat as those receiving emergency unemployment compensation increased by almost 100,000 to a new record high, notes Miller Tabak equity strategist Peter Boockvar.

The evidence is clear “that companies continue to reduce the level of firings but still remain extremely reluctant to hire new workers,” he says, which is why Congress is “already discussing a further extension of unemployment insurance.”

While the stock market cheers the fact that the number of people filing for jobless claims is diminishing, claims are still in “deep-recession territory” and remain higher than at any time last year, Justin Fox writes at Time’s Curious Capitalist blog.

“So is this a jobless recovery or a labor market so bad it may take the economy back down with it again?” Fox ponders. “I’m still going with the former, but that could just be because I’m congenitally optimistic.”

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