Posts filed under “Economy”
Challenger, Gray & Christmas said companies announced 104,530 job cuts in November, up 5.1% from a year earlier and 2.6% from October. U.S. employers have announced 930,690 job cuts this year, down 19 percent from the same period a year earlier.
November was the 3rd consecutive month of >100k+ intentions to lay off; The last time this occurred was January to April in 2002. Year-to-date, the number stands at 930,690 — 20% below the same time 2003.
GM, Colgate, Time Warner (AOL), United Airlines, PNC, Progress Energy, Cingular were amongst the companies making recent lay off announcements.
2004 is still on track to being the 4th straight year of more than 1 million layoffs. The magic number is just 69,310 more layoffs by December 31st.
John Challenger was pragmatic:
“The biggest worry for the economy is that the large number of lower-middle-class and middle-class Americans struggling to make it paycheck to paycheck will be short discretionary income during the holiday shopping season . . . Higher health care and energy costs for employers and employees are definitely taking a toll. Companies are being forced to enact more cost-containment measures to protect profits.”
This year, the U.S. has created ~2 million new jobs. During the same period, Challenger, Gray reports 960,390 layoff announcements have been made. And on top of that, the Labor Force has grown by 800k bodies over the past two months.
Taken together, these hardly paint a very bright job picture . . .
Job cut plans accelerate
CNN/Money, December 7, 2004: 2:52 PM EST
Here’s yet another online-only WSJ column: Season’s Subtotal. The WSJ will take a "regular look at how the holiday season is progressing at retailers, rounding up the latest takes from Wall Street, market-research firms and news reports."
I’ll point to it when I catch the updates; Here’s an excerpt:
And, they’re off! Retail-tracking firm ShopperTrak estimated that retail sales for Black Friday, so called because it marks a shift to profitability for many retailers, rose 11% from last year to about $8 billion. Saturday, however, "was weak and disappointing, so together it was only a modest two-day performance,” said Michael P. Niemira, chief economist at International Council of Shopping Centers.
Mall cornerstones J.C. Penney and Sears Roebuck reported solid sales, but a lack of deep discounts at Wal-Mart meant fewer rings of the retail giant’s cash registers. Analysts say discounters are likely to have a hard time this holiday season because lower-income customers have been hardest hit by soaring gasoline prices. Still, Mr. Niemira expects chain-store sales will grow 3% to 4% this holiday season from last year.
"We are living with an energy illusion of the highest order,"
So warns oil banker Matt Simmons, 61, whose "bold and often prescient pronouncements have won him followers — and detractors — in the course of his 30-year career."
According to Simmons, whether the Saudis have overestimated their crude reserves or not is the key question for energy prices the next decade or so.
In an interview with Barron’s, Simmons lays out the Bull case for Oil:
"With global demand for oil on the rise, and prices hovering near $50 a barrel, the Saudis’ production profile is more than academic. The No. 1 oil producer, Saudi Arabia pumps 13% of the world’s oil and boasts 23% of its oil reserves. Moreover, the Saudis alone claim to have excess production capacity and the ability to increase output if demand continues to rise.
Simmons’ conclusions are based largely on his analysis of the high water content and other signs of aging of Saudi oil fields. Not surprisingly, they have caught the attention of Saudi Aramco, the kingdom’s national oil company, which has dismissed his views and remains committed to previously published numbers of the size of Saudi reserves.
Because the Saudi oil industry is state-run, and there is no independent auditor of national reserves, it is impossible to determine just how large — or small — the Saudis’ are.
If the Saudis’ numbers are correct, the kingdom could continue to produce at current levels of about 10 billion barrels a day for the next 50 years, or more. That would give the industrial world time to develop alternative energy sources and prepare for a graceful transition.
If Simmons is right, however, the world could face a dangerous imbalance between rising oil demand and diminishing supply, perhaps within the next 10 years. Oil prices could soar, economies could suffer, and oil-dependent nations, such as the U.S., China and Japan, would be forced to scramble for additional energy sources."
Consistent with my long term view on this sector, Simmons may not be that far off.
Barron’s, NOVEMBER 29, 2004