Employers in the US probably cut jobs this month at a slower pace and manufacturing grew for the first time in more than a year, adding to evidence the worst recession since the 1930s is ending, economists said before reports this week.
Payrolls fell by 230,000 workers, the smallest decline in a year, according to the median of 65 estimates in a Bloomberg News survey ahead of a Labor Department report on Friday. Figures from a private group of purchasing managers tomorrow may show the first expansion at factories since January last year.
“We are heading out of the tunnel,” said Jonathan Basile, an economist at Credit Suisse in New York. “It doesn’t mean we’ll have a very rapid recovery because consumers still face many headwinds.”
The worst employment slump in the post-World War II era, a record loss of wealth and mounting foreclosures are among the obstacles US households have to overcome before any recovery can gain speed. Government programs, including “cash for clunkers” and credits to first-time homebuyers, may help the economy expand in the second half of the year.
The jobless rate this month is likely to climb to 9.5 percent from 9.4 percent the prior month, economists surveyed by Bloomberg said. Unemployment will reach 10 percent by early next year, a Bloomberg poll this month showed.
Payroll losses peaked at 741,000 in January, the most since 1949. The US has lost 6.7 million jobs since the recession began in December 2007.
Some companies continue to eliminate jobs to cut costs and boost profits amid weak sales. Whirlpool Corp, the world’s largest appliance maker, said last week it would close a manufacturing plant in Evansville, Indiana, resulting in the loss of 1,100 jobs, or about 1.6 percent of the company’s workforce.
A record reduction in inventories over the first half of the year sets the stage for production to rebound, economists said. Companies including General Motors Co and Chrysler Group LLC, both out of bankruptcy, may benefit from higher sales and a boost to output from the government’s “cash-for-clunkers” effort.
The incentive program, which offered buyers discounts of as much as US$4,500 to trade in older cars and trucks for new, more fuel-efficient vehicles, produced almost 700,000 automobile sales before ending on Aug. 24, the Transportation Department said last week.
The jobs report is also projected to show manufacturing employment dropped by 60,000 this month, up from 52,000 last month. The pace of industry cutbacks had declined since January, when 262,000 workers lost their jobs, the most since 1975.
One reason for the projected increase in factory job cuts this month is that the pace of hiring at carmakers probably ebbed.
Automakers added 28,200 workers last month, the biggest one-month increase in more than a decade, the Labor Department said on Aug. 7.
GM this month called back 1,350 union workers, its biggest one-time increase in jobs since 2006, as it boosts second-half production, in part because of “cash for clunkers.”
Sales figures from the auto industry are due this week. Increasing demand will contribute to the stabilization in manufacturing already taking place.
The Tempe, Arizona-based Institute for Supply Management (ISM) could report in two days that its manufacturing index climbed to 50.5 this month, the Bloomberg survey median showed. Readings above 50 signal expansion.
Orders placed at factories likely jumped 2.2 percent last month, the most in two years, economists said ahead of a Commerce Department report scheduled for Wednesday.
Service industries, which make about 90 percent of the economy, are likely to show signs of improving.
The ISM’s gauge of non-manufacturing businesses probably increased to 48 last month from 46.4 last month, the survey showed. The report is scheduled to be released on Thursday.
MORE VISITORS: The Tourism Administration said that it is seeing positive prospects in its efforts to expand the tourism market in North America and Europe Taiwan has been ranked as the cheapest place in the world to travel to this year, based on a list recommended by NerdWallet. The San Francisco-based personal finance company said that Taiwan topped the list of 16 nations it chose for budget travelers because US tourists do not need visas and travelers can easily have a good meal for less than US$10. A bus ride in Taipei costs just under US$0.50, while subway rides start at US$0.60, the firm said, adding that public transportation in Taiwan is easy to navigate. The firm also called Taiwan a “food lover’s paradise,” citing inexpensive breakfast stalls
TRADE: A mandatory declaration of origin for manufactured goods bound for the US is to take effect on May 7 to block China from exploiting Taiwan’s trade channels All products manufactured in Taiwan and exported to the US must include a signed declaration of origin starting on May 7, the Bureau of Foreign Trade announced yesterday. US President Donald Trump on April 2 imposed a 32 percent tariff on imports from Taiwan, but one week later announced a 90-day pause on its implementation. However, a universal 10 percent tariff was immediately applied to most imports from around the world. On April 12, the Trump administration further exempted computers, smartphones and semiconductors from the new tariffs. In response, President William Lai’s (賴清德) administration has introduced a series of countermeasures to support affected
CROSS-STRAIT: The vast majority of Taiwanese support maintaining the ‘status quo,’ while concern is rising about Beijing’s influence operations More than eight out of 10 Taiwanese reject Beijing’s “one country, two systems” framework for cross-strait relations, according to a survey released by the Mainland Affairs Council (MAC) on Thursday. The MAC’s latest quarterly survey found that 84.4 percent of respondents opposed Beijing’s “one country, two systems” formula for handling cross-strait relations — a figure consistent with past polling. Over the past three years, opposition to the framework has remained high, ranging from a low of 83.6 percent in April 2023 to a peak of 89.6 percent in April last year. In the most recent poll, 82.5 percent also rejected China’s
PLUGGING HOLES: The amendments would bring the legislation in line with systems found in other countries such as Japan and the US, Legislator Chen Kuan-ting said Democratic Progressive Party (DPP) Legislator Chen Kuan-ting (陳冠廷) has proposed amending national security legislation amid a spate of espionage cases. Potential gaps in security vetting procedures for personnel with access to sensitive information prompted him to propose the amendments, which would introduce changes to Article 14 of the Classified National Security Information Protection Act (國家機密保護法), Chen said yesterday. The proposal, which aims to enhance interagency vetting procedures and reduce the risk of classified information leaks, would establish a comprehensive security clearance system in Taiwan, he said. The amendment would require character and loyalty checks for civil servants and intelligence personnel prior to
RSS