Can the economy survive the Fed?

4:00 PM economy, survive No Comments

Business Week | By Anthony Mirhaydari, MSN Money

Cheap money from the Federal Reserve has been the primary force keeping the market high and the economy on a recovery path. But can they keep it up when the stimulus ends?

After the market turmoil of the last few days, the inevitable question is: Now what?

Months of calm and upward momentum have suddenly been replaced by uncertainty, volatility and fear. The Dow Jones Industrial Average ($INDU) has tipped into its worst sell-off since October. Japanese and Chinese stock indexes have entered bear-market territory, with the Shanghai Composite earlier this week testing levels not seen since January 2009.

This follows months of selling in commodities, precious metals and corporate bonds. It looks like the start of the pullback-or-worse trend I've been warning of, in columns such as "Beware: Market insiders are selling."

The central issue is pretty clear: The Federal Reserve is moving to phase out cheap-money stimulus by trimming its $85 billion-a-month "QE3" bond-buying program. The timing is unclear, but no longer can we assume that government borrowing costs, and thus interest rates throughout the economy, will remain low and docile for years to come.

The Fed's cheap money has been the key to keeping the economic recovery going and to the market's big rally and recent all-time highs. So can the economy keep going without it? Let's take a look at the road ahead.

At this point, the near-term concern is how bad the market damage will be as major uptrend support is broken. Investors have been reminded that stocks can, indeed, go down persistently.

On a technical basis, things aren't looking good:

Anthony Mirhaydari

? Cyclical, economically sensitive stocks like materials and energy are starting to weaken once more compared with defensive sectors such as health care.

? The percentage of Standard & Poor's 500 Index ($INX) stocks going up has fallen at a rate not seen since the May 2012 sell-off, and before that, the August 2011 meltdown.

? The number of stocks hitting new 52-week lows on the New York Stock Exchange each day has moved to levels not seen since August 2011 levels.

? Traders are rushing into put options, which profit when stocks go down, at such a pace that they're pushing the CBOE Volatility Index (VIX) or "fear gauge" -- which is calculated based on the price of options contracts -- above its 200-day moving average for the first time since, you guessed it, August 2011.

As a rough estimate of how bad it could get before we see a relief rally, a test of the S&P 500's February low near its 200-day moving average around 1,500 should be expected at the very least -- which would represent a decline of an additional 4% or so. A test of support at the October high near 1,450 would be worth a loss of 8%.

Whether the losses move deeper than that, in the near term, depends mainly on whether the Fed pushes ahead with its tapering plans at its July and September policy meetings, or moves more slowly. And that depends on the flow of economic data. A deeper drop in inflation measures or any slowdown in monthly job gains would likely change the tone coming out of the Fed. It would show that the Fed shares Wall Street's lack of faith in the economy's strength, which the pros might find comforting.

Other factors will also shape what the Fed and the economy do next.

The next step in Japanese Prime Minister Shinzo Abe's plan to revitalize his nation's economy -- via reforms of Japan's crusty economic institutions -- hangs on parliamentary elections July 21. A recent electoral victory in the 127-seat Tokyo Metropolitan Assembly bodes well for Abe, but certainty that reforms will keep moving ahead will help the global economic picture.

Also critical: whether the Chinese continue to clamp down on credit growth in the days ahead by allowing interbank lending rates to stay high. The overnight borrowing rate jumped from less than 2.5% earlier this year to as high as 13.2% last week before settling just below 6%. If the situation doesn't calm down, volatility in Chinese equities could destabilize the region and keep pressure on U.S. issues as well.

Finally, we have the upcoming second-quarter earnings season to worry about. Alcoa (AA) kicks things off July 8. Executives have been cutting earnings guidance at a pace not seen since the dot-com bubble was bursting, amid weaker profitability and tepid global demand. Analysts are looking for S&P 500 earnings growth of 3.2% and sales growth of 1.7%; that's down from expectations of 6.1% and 3.7%, respectively, back in April.

If earnings fall and the Fed starts to gut stimulus efforts, the market and the economy would get a nasty one-two punch to the gut.

Over the longer term, whether the economy can move forward without the Fed is far from certain.

What we don't know just yet is whether the U.S. economy is continuing to slow -- as some recent data suggest -- or re-accelerating, as the Fed is forecasting.

And while the latter sounds good, it would also mean that inflation-adjusted interest rates, which have already shot up (as shown in the graph below) are headed even higher.

That will test whether the housing market -- and all the activity by investors that has helped push it higher -- is strong enough to absorb a rise in mortgage rates.

Higher rates will also increase the government's borrowing cost and the cost of capital for businesses, and put further pressure on bond-heavy investor portfolios (the subject of my column last week, "The next big 401k wipeout").

Oh, and let's not forget that we are in a global economy. After Japan and China, focus will turn to again to Europe. As the eurozone recession spreads to Germany and a relatively lofty valuation for the euro damages export competitiveness, the European Central Bank will be tempted to deal out more cheap-money stimulus, building on its 0.25% interest rate cut on May 2.

While this would be a good thing, it most likely won't come until after German elections in September to avoid making it a political issue for Chancellor Angela Merkel. There is also a risk that German courts could throw a wrench in the works by declaring existing eurozone rescue efforts unconstitutional.

All this is a lot for the Fed to take into account in the months ahead. The complex picture is part of the reason the Fed has been committed to stimulus for roughly four years now -- and it explains why so many investors are nervous at the prospect of that one constant positive coming to an end.

Read More

Can we save the US economy?

7:00 PM American Dream, economy, save, US No Comments

| By Anthony Mirhaydari, MSN Money

Five years after the financial crisis, the economy is still just limping along. It's clear that deeper problems are plaguing the country. We can solve them -- but will we?

Let me start by saying I love this country.

It remains the hope of the Earth, a beacon of hope for the distressed and oppressed, and a reason people all across this country, including my father, left their country of birth to come in search of freedom and opportunity.

But as we mark the fifth anniversary of the financial crisis -- the bank bailouts passed on Oct. 3, 2008 -- it's clear that the American economy is still faltering, and that our problems go deeper than that financial mess.

The middle class in this country faces an existential threat. The expansion of government benefits hasn't stopped its decline. The expansion of cheap credit hasn't solved the problem, either. Our problems predate the financial meltdown, and the two asset bubbles this century -- in stocks and homes -- only made the existing problem worse.

The American Dream is quickly becoming a false promise for many. A higher education is no longer a guarantee of success. Homeownership isn't necessarily the road to riches, or even financial security. The stock market looks to many like a den of thieves armed with weapons-grade computer trading algorithms.

I've explored these issues in a number of recent columns, including "No recovery for the middle class." Today, I want offer a few ideas on what it'll take to turn things around. Because I believe we can, if we have the will.

The core of the matter is that, while the overall U.S. economy continues to grow, albeit at a slower pace than what we're used to historically, average families aren't capturing the benefit. You can see this in the way household income is badly lagging each family's share of the economy.

Anthony Mirhaydari

In 2009, which is the most recent data, the average household pulled in $34,100. But the share of the economy the average family produced was $47,041; the difference goes to things like business profits and executive pay, which are rising quickly.

Back in the late 1970s, an average household's income slightly exceeded its share of the economy. So this is a recent change.

Part of the problem is that fewer folks are working, with the percentage of full-time workers in the population down to 37%, versus 41% in 2000. And part of the problem is that wages for most working people have stagnated as laborers have lost the negotiating power they once enjoyed to the pressures of outsourcing, offshoring and automation. These have hollowed out the medium-skill jobs that are the backbone of the middle class.

That growing difference between productivity and pay has, in fact, benefited somebody. Corporate profits are at record highs and have grown, as a share of the overall economy, by 34% since 1981. Middle-class income, as a share of the economy, has fallen 20% over that period.

That, in turn, has benefited the wealthy who own the vast majority of corporate equity, including stocks. The gross before-tax real income of the top 1% has more than doubled since 1979, rising from $523,300 to more than $1.2 million. The middle class has seen a paltry 21% gain, from $53,100 to $64,300.

The result? More than one in seven Americans are on food stamps. And 47 million Americans are now living in poverty.

So far, our elected (and unelected) officials have tried to battle our economic malaise using low taxes, more spending and more money printing from the Federal Reserve.

The results speak for themselves. We're in the midst of one of the weakest economic recoveries in the country's history, after one of the sharpest downturns.

Tax cuts haven't worked because businesses and investors view them as temporary. Increased welfare spending (up 158% since 2001) is encouraging many to simply give up. Disability enrollment is up 53%, with the ratio of disabled to active workers above 6%, versus the nearly 2% seen in the 1980s. This suggests some people are using disability to avoid the chaos in the job market.

As benefits are structured now, ambition and drive are discouraged amongst the disadvantaged. This undermines one of the core tenets of the American Dream: The idea that hard work, risk taking and self-determination are the way to a better life.

According to a presentation by Gary Alexander, Pennsylvania's secretary of public welfare, a single mom is better off earning a gross income of $29,000 and applying for welfare benefits (including children's health insurance, child care and housing subsidies) that would bump up her total income to $57,327. If she worked hard and earned a gross income of $69,000, her after-tax take-home pay would be just $57,045.

Why then, would she take that extra shift at work or apply for a promotion, even if it's offered?

The other big economic problem, over the long term, is health care. We are all simply overpaying for substandard care early in life and avoiding the tough end-of-life decisions that cause 25% of all Medicare spending to go to the 5% of recipients who die each year -- with 80% of that going to those in the last two months of life.

There's also no reason an MRI screening should cost $1,080 in America but just $280 in France, according to the International Federation of Health Plans. Or why the cost of an MRI in Washington, D.C., varies from $400 to $1,861, depending on provider. Or why, in 2009, Americans spent $7,960 per person on health care versus $4,808 in Canada, $4,218 in Germany and $3,978 in France. We're no healthier.

There's also no reason why less expensive, palliative hospice care that allows people to enjoy their last days on this earth in peace at home is shunned in favor of having loved ones poked, prodded and intubated, floating in and out of consciousness under the fluorescent lights of a $30,000-a-night hospital room.

We've also overpromised entitlement benefits without collecting enough in taxes to fund them. The average two-earner couple that retired in 2010 will enjoy $387,000 in Medicare benefits after contributing (assuming a 2% real rate of return) $122,000 in Medicare taxes.

Whatever you think of Obamacare, it doesn't make enough of the hard decisions we need.

The Fed's constant flow of cheap money has kept the recovery trickling along. Short-term interest rates have been held near 0% since 2008 to help the nation get past the financial crisis. Multiple iterations of long-term bond purchases -- dubbed "quantitative easing" -- have taken the monetary base from $800 billion before the financial crisis to nearly $3.6 trillion now.

That's helped inflate asset prices on Wall Street. And last week, the surprise "no taper" decision shows the Fed will keep pumping money in until inflation gets out of control, which it inevitably will.

But all this monetary malfeasance hasn't benefited middle-class families or spurred robust job gains, because among the many problems we face, a lack of low-cost credit isn't one of them. We're already too deep in debt, as the chart below shows. And the harder the Fed pushes, the higher the risks are down the road.

Societe Generale U.S. economist Aneta Markowska believes that, based on the classic "Taylor rule" interest-rate setting formula created by Stanford economist John B. Taylor, the Fed shouldn't just have already stopped its ongoing, open-ended $85 billion-a-month QE3 bond-purchase program. It should already be raising short-term interest rates from near 0% toward a target of around 3% next year.

The longer these problems stand unaddressed, the worse America's finances get. Unless things improve soon, we'll run out of runway.

The long-term federal budget is broken as the state, and the promises it's made, overwhelms the private economy. The Congressional Budget Office is warning of serious trouble if we don't get a handle on it, despite all the budget cutting we've already done over the last few years. (For details on what the CBO said, read last week's column, "Caution: Budget fight dead ahead.")

As I touched on last week, the only way out is to reform both spending and taxes in a pro-growth way that kick-starts the economy. Welfare programs need to be restructured. On entitlements, we need to recognize that there are better end-of-life options, that the rich don't need the same level of assistance as everyone else, that hospitals and doctors should be subject to the forces of free market competition (price transparency and quality rankings), and that some medical treatments do, in fact, provide more benefits than other more expensive options.

But given what we're seeing in Washington, it seems we'll be lucky if they can even agree to pay bills they've already run up.

Read More

Will DC break the economy again?

11:00 AM again, break, budget, economy No Comments

| By By Anthony Mirhaydari, MSN Money

Budget cuts and global issues have sucked out some of the wind, but a turn for the better seems imminent -- unless another round of budget infighting in Washington gets in the way.

Another budget battle is just around the corner in Washington, and it comes at a tough time for the economy.

While stocks are doing just fine right now, and job gains have been robust, the overall economy has been a bit underwhelming. Growth has averaged an annual rate of just 1% in the past nine months, the weakest since the recession ended, as cutbacks in federal spending and higher taxes on the well-to-do have sucked some of the wind out of its sails.

There are other concerns, too. China's clampdown on excessive and illicit lending practices has slowed the Middle Kingdom's economic juggernaut to a tepid pace. Markets, consumers and businesses are still adapting to the Federal Reserve's plans to pull back on its $85 billion-a-month bond purchase stimulus and the rise in interest rates that has accompanied it (10-year Treasury yields are up from 1.7% in May to 2.6% now).

So here we go again in Washington, as President Barack Obama and Republicans in Congress prepare for new clashes, this time over the 2014 budget and the Treasury's debt limit. They need to pass either a budget or a resolution to keep the government running before Oct. 1 -- and they have only a handful of working days to get it done.

If they do pass something, the economy looks ready to reaccelerate back toward a 3% growth rate, something Wall Street analysts expect. If they don't, we could be on the cusp of another 2011-style fiscal fright.

To be sure, everyone is tired of the rancor and the repeated fights over taxes and spending. A new Wall Street Journal/NBC poll shows that partisan gridlock has taken a toll: Obama's approval rating has fallen to its lowest level since late 2011 at just 45%, while Congress' approval rating is a laughable 12%. Just 29% of Americans believe the country is on the right track. And 57% say every member of Congress should be replaced.

Anthony Mirhaydari

People understand deep down that major reforms are needed. The tax code is bloated and inefficient, with billions lost in compliance costs. Entitlement programs are overpromised, underfunded and pouring money into a system that overcharges for mediocre medical care. Infrastructure is literally crumbling. We're falling behind our global peers on things like education, high-speed Internet and high-value manufacturing.

The good news is progress is being made on the government's annual budget deficit, which is expected to shrink to less than 4% of gross domestic product this year and fall below 3% by 2015, a course that stabilizes the debt-to-GDP ratio in the 70%-73% range by 2023. Just two years ago, the forecasts said this critical ratio would reach 109% that same year -- with some economists warning that any number higher than 100% or so would damage the economy's long-term prospects.

Businesses are reacting to this, as noted by Societe Generale economists in the chart below, with a drop in economic policy uncertainty and a slight rise on confidence. They see things getting better.

The cost of deficit reduction has been the drag on the economy from automatic budget cuts known as the sequester and from tax hikes earlier in the year. Together, they have sliced the GDP growth rate by about 2%, which suggests the underlying economy could manage something closer to 3% if it were unhindered.

But more needs to be done, especially on long-term entitlement programs, including Medicare and Social Security. Overall, the Committee for a Responsible Federal Budget says an additional $2.2 trillion needs to be taken out of the budget deficit over the next 10 years (in addition to the $1.2 trillion or so in cuts from the sequester) to put the national debt on a clear downward trajectory.

I'm cautiously optimistic that a deal will get done. Most likely, programs like Medicare will become means-tested. That will give Democrats a way to say they are socking it to the rich. And it will give Republicans a chance to say they have cut spending and prevented a tax hike. There is also some common ground on tax cuts for small businesses and manufacturers, the subject of Obama's speech earlier this week. Finding an agreement on reforming the tax code is also possible, but less likely than these two items.

The question is how they get there and whether the battles over the budget and the debt ceiling expand to include Obamacare as well. If so, it will make compromise much more difficult. And time is relatively short; after this week, Congress is in recess through Labor Day, then it has just nine official legislative workdays through the end of September.

If we can get through the minefield in Washington, there is plenty to be optimistic about in the real economy. With many inventories depleted, new orders are flowing in to manufacturers as factories spool up again. The job market is tightening, forcing wages higher. Income tax withholdings, a real-time gauge of household earnings power, were up 6% in June -- the best performance for the month since 2007.

The economy also appears to be digesting the recent rise in interest rates rather well. Some of this is because the banking system has been and remains awash in extra cash, with excess reserves totaling nearly $1.9 trillion. That's a lot of extra money just sitting in bank vaults waiting to be lent out. As a result, UBS economist Maury Harris notes that bank lending standards are easing to an extent that's been associated, historically, with faster job growth and hasn't been seen since the 2004-2006 period.

That's keeping the momentum behind housing, where, despite the increase in mortgage rates, activity remains robust, thanks to higher expected prices and dwindling inventories. Auto sales continue to strengthen as well.

Read More

Can the economy survive the Fed?

4:18 AM economy, survive No Comments

By Anthony Mirhaydari, MSN Money

Cheap money from the Federal Reserve has been the primary force keeping the market high and the economy on a recovery path. But can they keep it up when the stimulus ends?

After the market turmoil of the last few days, the inevitable question is: now what?

Months of calm and upward momentum have suddenly been replaced by uncertainty, volatility and fear. The Dow Jones industrial average ($INDU) has tipped into its worst sell-off since October. Japanese and Chinese stock index have entered bear market territory, with the Shanghai composite earlier this week testing levels not Lakes since January 2009.

This follows months of selling in commodities, precious metals and corporate bonds. It looks like the start of the pullback-or-worse trend I've been warning of such columns as "Beware: market insiders are selling."

The central issue is pretty clear: the Federal Reserve is moving to phase out cheap-money stimulus by trimming its $85 billion-a-month "QE3" bond-buying program. The timing is unclear, but no longer can we assume that government borrowing costs, and thus interest Council throughout the economy, will remain low and docile for years to come.

The Fed's cheap money has been the key to keeping the economic recovery going and to the market's big rally and recent all-time highs. So can going without it the economy keep? Let's take a look at the road ahead.

At this point, the near-term concern is how bad the market damage will be as major uptrend support is broken. Investors have been reminded that stocks can, indeed, go down persistently.

On a technical basis, things aren't looking good:

Anthony Mirhaydari

? Cyclical, economically sensitive stocks like material and energy are starting to weaken once more compared with defensive sectors such as health care.

? The percentage of standard & poor's 500 index ($INX) stocks going up has falling at rate a Lakes since the may emergency 2012 sell-off, and before that, the August 2011 meltdown.

? The number of stocks hitting new 52-week lows on the New York Stock Exchange each day has moved to levels not Lakes since August 2011 levels.

? Traders are rushing into put options, which profit when stocks go down, at such a pace that they're pushing the CBOE volatility index (VIX) or "fear gauge" – which is calculated based on the price of options contracts – above its 200-day moving average for the first time since, you guessed it, August 2011.

As a rough estimate of how bad it could get before we see a relief rally, a test of the S & P 500's March low near its 200-day moving average around 1,500 should be expected at the very least--which would represent a decline of an additional 4% or so. A test of support at the October high near 1.450 would be worth a loss of 8%.

Whether the losses move deeper than that, in the near term, depends mainly on whether the Fed pushes ahead with its tapering plan at its July and September policy meeting, or moves more slowly. And that depends on the flow of economic data. A deeper drop in inflation measures or any slowdown in monthly job of problemkrediten would likely change the tone coming out of the Fed. It would show that the Fed shares Wall Street's lack of faith in the economy's strength, which the pros might find comforting.

Other factors will so shape what the fed and the economy do next.

The next step in Japanese Prime Minister Shinzo Abe's plan to revitalize his nation's economy - via reforms of Japan's crusty economic institutions - hangs on parliamentary elections July 21 A recent electoral victory in the 127-seat Tokyo Metropolitan Assembly bodes well for Abe, but drive that reforms will keep moving ahead will help the global economic picture.

So critical: whether the Chinese continue to clamp down on credit growth in the days ahead by allowing interbank lending Council to stay high. The overnight borrowing rate high as 13.2% jumped from less than 2.5% earlier this year to as last week before settling just below 6%. If the situation doesn't calm down, volatility in Chinese equity could destabilize the region and keep pressure on U.S. issues as well.

Finally, we have the upcoming second-quarter earnings season to worry about. Alcoa(AA) kicks off July 8 executives things have been cutting earnings guidance at a pace not Lakes since the dot-com bubble what bursting, amid weaker profitability and tepid global demand. Analysts are looking for S & P 500 of 3.2% earnings growth and sales growth of 1.7%; that's down from expectations of 6.1% and 3.7%, respectively, back in April.

If earnings fall and the Fed starts to good stimulus efforts, the market and the economy would get a nasty one-two punch to the well.

Over the longer term, whether the economy can move forward without the Fed is far from certain.

What we don't know just yet is whether the U.S. economy is continuing to slow - as some recent data suggest - or re-accelerating, as the Fed is forecasting.

And while the latter sounds good, it would therefore mean that inflation-adjusted interest Council, which have already shot up (as shown in the graph below) are headed even higher.

That will test whether the housing market - and all the activity by investors that has helped push it higher - is strong enough to absorb a rise in mortgage Council.

Higher Council will therefore increase the government's borrowing cost and the cost of capital for businesses and put further pressure on bond-heavy investor portfolios (the subject of my column last week, "The next big 401k wipeout").

Oh, and let's not forget that we are in a global economy. After Japan and China, focus will turn to again to Europe. As the eurozone recession spreads to Germany and a relatively lofty valuation for the euro damages export competitiveness, the European Central Bank will be tempted to deal out more cheap-money stimulus, building on its 0.25% interest rate cut on May 2.

While this would be a good thing, it most likely won't come until after German elections in September to avoid making it a political issue for Chancellor Angela Merkel. There is also a risk that German courts could throw a wrench in the works by declaring existing euro zone rescue efforts unconstitutional.

All this is a lot take to for the fed into account in the months ahead. The complex picture is part of the reason the Fed has been committed to stimulus for roughly four years now - and it explains why so many investors are nervous at the prospect of that one constant positive coming to an end.

Read More

Economy created modest amount of jobs in Dec.

2:30 PM amount, created, economy, modest No Comments

Patrick Rizzo and John Schoen

Employers last month shrugged off worries about the high-profile budget battle in Washington and continued hiring at a slow, steady pace, government data showed Friday.

“(The job market) has been very resilient to a lot of the uncertainty that people have been talking about,” said Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities and former economic adviser to Vice President Joseph Biden. “This is an okay job report at a time when you might have expected something worse.”

But the pool of workers looking for a job remains nearly twice as big as it was before the 2007 recession began to take hold.

The Labor Department reported Friday that payrolls, rose by 155,000 in December. That’s just about fast enough to keep pace with the growth of the population, but not enough to make a dent in the unemployment rate, which remained stuck at 7.8 percent last month.

“This has been the story throughout the recovery that began more than three years ago,” said Paul Ashworth, chief U.S. economist at Capitol Economics.

The number of unemployed Americans last month was essentially unchanged, at 12.2 million. That’s down from a peak of 15.4 million in October, 2009, but much higher than the 6.7 million who were out of work in March 2007.

The job gains last month were spread over a broad segment of the economy, from construction to manufacturing to health care.

Economists say the breadth of jobs gains is a good indication that the slow but steady recovery remains on track. But most forecasters expect the lackluster pace of growth – about two percent as measured by the gross domestic product – to continue through 2013.

Wage growth also remained flat, after adjusting for inflation, as it has since the recovery began. That trend runs counter to past economic rebounds, when wages have traditionally risen as the unemployment rate has fallen, according to Wells Fargo chief economist John Silvia.

“(That) supports the message of weaker consumer spending and GDP growth ahead,” he said

While the political spectacle of a dysfunctional government seems have had little impact on December hiring, the results of the budget battle are expected to have at least some dampening effect on hiring. Government spending, a critical target in the ongoing debate, makes up roughly 20 percent of U.S. economic activity.

Friday’s numbers demonstrated the impact of the ongoing budget squeeze on the job market. In December, government at all levels cut 13,000 jobs. For all of 2012, government payrolls shrank by 68,000.

While the December jobless rate was nearly a percentage point lower than a year ago, it’s still well above the average over the last 60 years of about 6 percent. The drop has also come as millions of workers have given up trying to find work. As a result, the portion of the population officially counted in the labor force is at the lowest level in three decades.

The pool of “long-term” jobless workers – those without a paycheck for 27 weeks or more – remained unchanged in December at 4.8 million, or nearly 40 percent of the unemployed.

That high level of persistent unemployment prompted the Federal Reserve to embark on its latest, open-ended round of bond buying in September to force interest rates lower and help spur hiring. The central bank has kept interest rates near zero since 2008. On Thursday, however, minutes from the Fed's December meeting suggested that some policymakers were growing more concerned about the impact of that policy on the financial markets.

Friday’s lackluster job data will likely help support proponents of the Fed’s continued easy-money policy, said Ashworth.

“If this state of affairs continues throughout most of this year, as we expect, then it is hard to see the Fed dialing back or stopping its (bond) purchases as some officials currently envisage,” he said.

The December report included a number of revisions, in part due to annual tweaks in the adjustments the Labor Department uses to smooth out seasonal swings in hiring. The government raised its estimate for the unemployment rate in November by a tenth of a point to 7.8 percent. The payroll number for November was also raised to 161,000 new jobs, from 146,000.

Read More

Economy poised to grow, once DC gets out of the way

4:30 PM economy, poised No Comments

John W. Schoen , NBC News

If the ongoing political dysfunction in Washington is weighing on the U.S. economy, someone forgot to tell Philip Derrow.

The second-generation CEO of Columbus, Ohio-based Ohio Transmission Corp., just closed his company’s 2012 books with 15 percent revenue growth for the year and a 10 percent expansion of the company's payroll. Derrow said he’s looking forward to a strong 2013.

"The talk in the media is harmful, the absence of leadership in our political class is harmful, but business leaders have an obligation to find a path forward," he told NBC News. "Sitting on your hands is how you lose. And losing is not an option."

Despite widespread, dire warnings that the ongoing budget stalemate threatens to send the U.S. back into recession, recent underlying economic data tell a different story.

The latest came from payroll processor ADP, which said U.S. private-sector employers added 215,000 jobs last month, well above economists' expectations. A separate report on planned layoffs showed the first drop in four months, according to employment consultants Challenger, Gray & Christmas, Inc.

"All the labor market data - the payroll numbers the jobless claims every else - have held up very, very well,” said Mark Zandi, chief economist at Moody's Analytics. “So there’s no sign of the fiscal cliff on the job market."

The improvement in the job market echoes signs of strength in the housing and auto industries. Despite the ongoing recession in Europe, manufacturers closed out the year on an upswing. Although retailers reported lackluster holiday sales, consumers have sharply pared down debt and built up savings, all of which bodes well for 2013.

Despite multiple pressures weighing on growth, the U.S. economy’s normal state is expansion. Beyond the underlying demand created by population growth, households continue to strive to build wealth and businesses remain bent on increasing profits.

As obstacles are removed – including the uncertainty over tax policy that was partially removed by the New Year’s fiscal cliff deal – those underlying forces have a better chance of taking hold.

Investors staging a New Year's rally in the stock market seemed to be betting that may happen in 2013.

"The underlying economy has momentum, and the employment data confirms that," said John Brady, a managing director at the investment firm R.J. O'Brien & Associates in Chicago. "The hope and prayer of the market is that our political leaders don't screw it up."

There are plenty of ways Washington could continue to hold back the U.S. economy. The most pressing is the possible repeat of the debt ceiling spectacle that produced the fiscal cliff in the first place, after lawmakers brought the country to the brink of a self-inflicted Treasury default in July 2011. The political “solution” was the creation of a fiscal cliff time bomb that has yet to be fully defused.

The ruinous, automatic spending cuts called for in that strategy are still in force; the recent deal just delayed them for two months. With government spending fueling about 20 percent of the U.S. economy, deep cuts could quickly derail growth coming from households and businesses.

Business investment has also been weak due in large part to the ongoing debate about the thicket of corporate taxes, including a series of temporary incentives to try to spur growth. Ironically, those measures may have added to the uncertainty that has prompted companies to hoard cash.

Derrow cites the government’s 2009 “cash for clunkers” program that produced a surge in car buying that summer, followed by a sales hangover once the incentives were exhausted. Short-term incentives designed to spur companies to buy new equipment and vehicles have made it harder to set long-term plans for investing capital, he said.

“Many if not most businesses have money to spend,” he said. “The problem is that policymakers for the past four years have made that spending very unpalatable."

But four years into the weakest recovery in a half century, pent-up demand is helping to overcome those hurdles to investment. After the worst contraction since the Great Depression the housing market is showing convincing signs of recovery.

Contracts to buy previously-owned U.S. homes rose in November to their highest level in 2-1/2 years, an industry group said last week. Though some local markets remain under pressure, home prices in most parts of the country are rising again.

That's good for the construction industry, according to Zandi. “I think we’re on the leading edge of a lot of construction jobs,” he said. “We are going to see a lot more homes built and a lot more office towers built over the next couple, three, four years. And so I think we’re going to see a lot of construction and construction-related jobs.”

The U.S. auto industry is also coming off a strong 2012 and expects higher sales in 2013. A new study by R.L. Polk forecasts 15.3 million new vehicle registrations in the U.S. this year – up 6 to 7 percent from the anticipated final sales numbers for 2012 and a roughly 50 percent increase from the bottom of the automotive market collapse during the recession.

American households, meanwhile, are making slow, steady progress in rebuilding the wealth lost to the housing and financial collapse. Much of the improvement has been the result of the Federal Reserve’s relentless, easy-money policy to drive down borrowing rates.

The savings on monthly mortgage and credit card payments have helped consumers work off the financial hangover of an epic, mid-2000s borrowing binge Though millions of homeowners remain underwater on their mortgages, the overall ratio between debt and disposable income fell to a near-decade low of 113 percent in the third quarter, after peaking at 134 percent in mid-2007, according to the latest Federal Reserve data. Even as wages have stalled, households’ overall net worth hit a four-year high in the third quarter of more than five times annual disposable income.

U.S. banks have also recovered from the heavy, self-inflicted losses brought on by risky bets on mortgage bonds that went bust. Though lending remains tight for all but the most credit-worthy borrowers, the banking system is better able to withstand the kind of financial shock that plunged the global economy into a steep recession more than five years ago.

For businesses like Ohio Transmission, there will always be potential landmines and obstacles to growth. But, after 30 years running the company, Derrow said that’s nothing new.

“The natural state of the American economy is for things to get better,” he said. “As business leaders, we make promises to our people that we'll find a positive way forward. That’s our job. That’s part of what makes business fun.”

Read More

Weak economy keeps adult kids in the house

5:00 PM adult, economy, House, keeps No Comments

Allison Linn , NBC News

You raise them, you educate them and you expect them to go out into the world. But they keep coming back.

The recession and weak recovery appears to be keeping many adult children from getting a home of their own, and that could have implications for the housing industry’s recovery.

A Census Bureau report released Wednesday found that between 2007 and 2011 there was a steady increase in the percentage of adults living in someone else’s house – and that increase has mostly been driven by adult children moving in with mom and dad.

In 2011, Census Bureau researchers found that 17.9 percent of people 18 and older, or 41.2 million people, lived in a house in which they weren’t the head of the household or that person’s spouse or significant other. That’s up from 16 percent in 2007, before the nation went into recession.

About half of those people were adult children living with their parents, while the rest were other relatives or unrelated people such as a group of roommates.

But Suzanne Macartney, an analyst in the poverty statistics branch of the Census Bureau and a co-author of the report, said the only group that saw an increase between 2007 and 2011 were adults moving in with their parents.

The nation was officially in recession from December of 2007 until June of 2009, but economic growth has largely been slow and unsteady in the years since.

The Census data runs through 2011. This year, economists have seen some signs that the housing industry is starting to recover, although there have been some bumps in the road.

There also have been more recent signs that housing formation is picking up, which would be good news for the economy and perhaps offer a sign that some young adults are moving out of mom and dad’s house. But economists caution that the improvements seen so far are not yet enough to offset the shortfall caused by the Great Recession and weak recovery.

If a significant number of adult children continue to bunk with mom and dad, economics caution that that could slow the housing industry’s recovery because those people won’t be out buying or renting homes of their own.

“It does have a negative impact,” said Joel Naroff, economist with Naroff Ecoomic Advisors. “The question is why is it happening.”

One potential reason: They may not have a paycheck to pay the rent or mortgage.

The unemployment rate for 20- to 24-year-olds was 13.2 percent in October, far above the overall rate of 7.9 percent. For 25- to 34-year-olds, it was 8.3 percent, still higher than for the general population.

Naroff said another major factor weighing on young adults is student loan debt, which is approaching $1 trillion by some estimates. The burden of those monthly payments may be keeping some younger adults from paying the rent on their own, let alone buying a house, even if they do have a job.

“You have a lot of the kids coming out with debt, and they’re not going out and buying houses, and that may be pushing out the whole process,” he said.

Naroff said it’s not yet clear how much of the problem is a cyclical one, caused by the high unemployment rate among young adults, and how much is a structural problem caused the increased burden of student loan debts leaving less money for things like homes.

If it’s mainly an issue of unemployment, he believes it could resolve itself in the next few years. But if the burden of student loan debts are keeping people from buying homes, that could be a longer-term problem.

It’s an issue he’s intimately familiar with. Naroff has a son who is graduating from college in a couple weeks. In the short term, Naroff said his son plans to do some graduate work. But after that, he’ll have to find a job.

“I’m already readying my extra bedroom for him,” Naroff quipped.

Read More

Buffett: Raising taxes on rich won't chill economy

5:00 PM Buffett, chill, economy, Raising, taxes No Comments

Super investor Warren Buffett, the chairman of Berkshire Hathaway, speaks with TODAY's Matt Lauer about Cyber Monday sales figures, consumer confidence and the future of the American economy.

By Ben Popken, TODAY contributor
Raising taxes on the rich won't dampen economic growth and would "raise the morale of the middle class," billionaire investor Warren Buffett told the TODAY show Tuesday.

Echoing a theme he has stressed often, Buffett downplayed the idea that higher taxes for the wealthy, as proposed by the Obama administration as part of a deal to resolve the "fiscal cliff," would scare off critical investment for job creation. Republicans argue that raising taxes on people in higher tax brackets would choke off investment and slow the economy at a time when it can ill afford it.

Buffett disagrees. "No, and I think it would have a great effect on the morale of the middle class," said Buffett, in the first of two live interviews with TODAY's Matt Lauer. "They've had to watch guys like me pay below the rate by that paid by the people in my office."

Also known as the "Oracle of Omaha" for his investing acumen, Buffett's views on the economy are widely followed, including on whether we're really going to go off the "fiscal cliff" of $500 million in tax hikes and spending cuts.

The CEO of Berkshire Hathaway has been vocal on the economy lately, proposing in a New York Times op-ed Monday that there be a minimum tax for the wealthy.

"I'm confident," said Buffet when asked about how he was feeling about the economy. "I can't speak for others, but at Berkshire Hathaway, we buy and sell stocks every day. America's a winner."

Lauer brought up a recent quote from Honeywell CEO David Cote who told Meet the Press that he and others like him were feeling a lack of confidence in the political process, so much so that the uncertainty was making them keep their money on the sidelines and preventing them from making additional investments, including hiring.

"At Berkshire Hathaway, we're investing 9 billion in plant equipment, a record, breaking last year's record. It's always uncertain," said Buffett.

"December 6th 1941 was uncertain," said Buffett, referring to the day before the attack on Pearl Harbor. "We just didn't know it."

When asked whether Congress would really enact a strong proposal such as the one Buffett made in his Times op-ed, which suggested setting a minimum 30 percent tax for millionaires, Buffet said, "I wouldn't be surprised. They're going to make a deal."

Now there's a new Buffett book, "Tap-Dancing to Work" that trace his career through 80 different FORTUNE Magazine articles over the years. If there's one thing that stuck out from the timeline, Carol Loomis, FORTUNE editor, who collected and expanded the articles for the book, told TODAY, it's "how consistent he's been in his thinking. He's never changed."

"I couldn't be more boring," said Buffett. "I just look at the facts and wherever they lead me, I go."

Is this the secret to Buffett's success? Lauer asked Loomis. It's hard, she said, because other investors "get emotional."

Buffett is known for finding undervalued companies with strong fundamentals and good management. "It's simple, but not easy," said Loomis. "That's why other people can't do it. He's thinking about business 24/7."

Lauer asked if this book was a goodbye letter of sorts. "What's it going to mean to the world when he hangs up his investing shoes?" he asked.

Loomis said, "He will be remembered. His role in life will be remembered for the next century. I don't know whether investing or philanthropy is going to be the lead item. People are going to be reading about Buffet 100 years from now."

About that retirement... "Got a date in mind?" Lauer asked the 82-year old businessman.

Buffett just laughed.

Read a free excerpt from the book Tap-Dancing to Work.

Read More

Economy stinks for many, but it's crushing millennials

6:00 PM crushing, economy, millennials, stinks No Comments

While the continued economic slump hobbles many Americans, the downturn is crushing young people.

Almost half of millennials—those between 18 and 34—think they'll be worse off than their parents, according to research from Demos, a non-partisan policy and research center.

And voters under age 30 in Tuesday's presidential election identified unemployment (49 percent) and rising prices (37 percent) as the most pressing economic issues they face, according to the Pew Research Center .

All this is forcing some young people to skip one of their favorite past times—eating out.

Among the heaviest restaurant users, new research shows in the year ending July 2012, millennials ate out 203 times annually — 49 times or 19 percent less than they did in the year ending July 2007, according to the NPD Group, a consumer market research firm.

"I've been doing this for 35 years and that has always been the case (millennials eating out). But not the last few years," said Harry Balzer, NPD's chief industry analyst. "This is all about how the economic downturn is affecting this group more than anybody else," he said.

(NPD defines dining out as everything from a Starbucks latte to a full sit-down meal at a restaurant.) Dining out costs roughly three times more than packing a sandwich or eating at home.

"I always bring my own lunch to save money," said Andrew Welsch, 28, of Long Island, N.Y. "My friends do the same thing. I still have to pay back my student loans," he said.

A generation defined by debt
Young people are cutting back on daily expenses such as dining out because personal debt levels are rising. Among college graduates, two-thirds owe an average of $28,500 in student loans, according to the Census Bureau and the Institute of Education Science. Average.

Many millennials are accumulating personal debt that spans unpaid student loans, credit card bills and medical expenses, according to the Demos report released last year.

With money tight, millennials voted this week with the economy on their minds. Voters under 30 also cited taxes and housing as important issues they face, said Scott Keeter, director of survey research for the Pew Research Center. He's also an exit-poll consultant for NBC News.

Weak job prospects
Weak job prospects are also hurting millennials. The unemployment rate for 18- to 34-year-olds for October was 10.8 percent, higher than the national unemployment rate of 7.9 percent, according to the U.S. Bureau of Labor Statistics.

Underemployment and low wages are problems too. More than half (57 percent) of young people would like to be working and earning more, and just half (53 percent) are working in their chosen fields, according to Demos research. Among millennials, more than half (56 percent) reported annual pretax incomes below $30,000.

With small incomes and little to no personal savings, many young people have delayed big life decisions.

Almost half (46 percent) have delayed buying a home, and nearly one third of millennials (33 percent) have postponed moving out on their own, according to Demos research. Welsch is holding off on getting an apartment with his girlfriend until after he completes his masters degree at the City University of New York.

Millennials have put off starting a family (30 percent), and a quarter has pushed back getting married.

Real happy hours
Welsch and others like him are riding out the economic downturn by reducing expenses such as dining out to celebrate birthdays. The gang used to gather at "a nice, mid-range restaurant — not McDonald's," he said.

But with the group unemployed or hours cut back, that tradition has been scrapped too. "We have to skip out on nonessentials like eating out, which is fun," he said.

With so many young people struggling, there could be a ripple effect for the restaurant industry. Younger diners traditionally have helped define eating trends as early adopters. "This group has been influential in their choices," said NPD analyst Balzer.

As a comparison, those aged 50 and older are eating out more since the depths of the 2008 financial crisis — 209 times annually this year compared to 197 outings for the year ending July 2007, according to the NPD Group's research.

So while older Americans fill sit-down restaurants, you'll likely find young people at bars, and enjoying a cheaper beer and snack.

"We’re a big fan of happy hour," said Welsch. "If we’re going out for drinks, it has to be happy hour — or we wouldn't do it."

With additional reporting by Erin Horan.

Read More

To develop economy, says fed

1:30 PM develop, economy No Comments

Wal-Mart Announces same-day delivery service in his latest attempt to capture Amazon's business. NBC Chris Clackum reports.

Touted sales today help strong sales at its U.S. grocery store and a great start to holiday Layaway Wal-Mart Stores Inc., to send shares of the world's largest traders on an all-time high.

Wal-Mart has put lined up holiday season $400 million in US Layaway sales in less than a month, half of the amount shoppers for all the 2011 on ice. This comes as the chain of concerted push to shoppers before the typical start of the holiday season to lure makes.

Shares of Wal-Mart reached as high as today 76,81 and closed at $75,42, its annual meeting with analysts and investors instead, which aired as the company over the Internet.

Wal-Mart United States plans, more than twice as many of its neighborhood market grocery stores in the United States more pressure on grocers by fiscal 2016, ¤ ft such as Kroger Co, Safeway Inc. and SUPERVALU Inc.

The stores, which are smaller than conventional Super Center and focus on food, have more profitable as Wal-Mart adds more of them. For existing neighborhood market store sales at a rate of more than 5 percent, or double the rate of overall Wal-Mart US chain.

"they kind of keys to the Castle now have," said Susquehanna Financial Group analyst Bob summers, who has a "buy" evaluation on Wal-Mart from the neighborhood market format.

Wal-Mart should more than 240 neighborhood market end fiscal year 2013 ends in January, and more than 500 tax 2016 stores adding more than 10 billion ultimately $ sales of company's US Chief Bill Simon said.

Meet in the year since the last investor has recovered Wal-Mart US arm, by far the largest business, from a prolonged slump. At the same time its international activities under the microscope have taken, the times article to a New York in April over alleged bribery on its Mexican unit.

Investors have the bribery probe, dismissed, which already Wal-Mart tens of millions of dollars, took as takes it, a closer look at the operations around the globe. Shares of Wal-Mart are about 22 percent since shortly before the New York Times story was published, with a 3 percent rise in the Dow Jones industrial average, compared the Wal-Mart is a component.

More than half of Wal-Mart shares are owned by the family of founder Sam Walton.

Large orders for the holiday season

Wal-Mart United States prepares for a strong holiday season, order, twice as many iPads from Apple Inc. and Duncan Mac Naughton, head of merchandising and marketing officer at Wal-Mart United States said other tablet computers like last year,

The company started also a Layaway of mid-September, a month earlier than it did when the service, again started offering it in 2011. With Layaway can buyers in the purchase of certain articles to put it on hold and they pay over the course of time.

"they could conceivably do 50 percent more Layaway this year than in the previous year" the has the potential, half a percentage point, the same sales growth, memory add, Susquehanna analyst Summers said.

Wal-Mart United States has now four consecutive quarters of same store sales growth after nine straight quarterly declines, although the pace of growth slowed to 2.2 percent in the second quarter from 2.6 percent in the first quarter released. The pace of the same storage quarterly sales growth routes nor competitors such as target Corp. and dollar General Corp.

Plans for Wal-Mart US of this holiday season include, offering sales prices on certain toys Tuesday due to feedback weekend of social media followers and with 100 "Twitter Elves" to help with marketing and customer service on the popular microblogging site. That said Sam's Club warehouse chain, holiday season plans include children place merchandise in their stores sell Sam's Club CEO Rosalind Brewer.

Wal-Mart almost everywhere winning market share, it is running, stores and still its international business as the engine of growth despite his decision looks to slow down the pace of store openings in some important countries, said CEO Mike Duke.

Duke also said that he believes that the company "plays to win in a very real way now" in e-commerce. He said he pleased with Wal-Mart advances in online search and other areas.

Wal-Mart still plans to open more stores around the world, but as this year announced it, it slows down the pace of store openings in Brazil, China and Mexico. In Brazil and China has Wal-Mart said that he would like to work on the improvements in its hundreds of shops. Meanwhile, the store process has permission from Mexico, where its local partners more than 2,000 sites has slowed down and be had bribed more complex following allegations that Government officials speed up the company approvals.

Wal-Mart United States plans about add, 205 fiscal year 2014 in this fiscal year and approximately 220-240 stores. Open Sam's Club plans, nine stores this year and next year of 10 to 15.

Wal-Mart international plans to add 21 million to 23 million square meters of space in the year 2013, down from an original target of 30 million. You plans to add another 20 million to 22 million square metres of space in fiscal 2014.

Read More

Hot jobs, careers defy sluggish economy

1:00 PM careers, economy, sluggish No Comments

Nathan Weber for NBCNews.com

Tom Fenwick, 36, a former Marine who served in Iraq, with his wife Judy and their twin 14-month-old daughters Rachel (left) and Emily outside the family home in Waukegan, Ill. Fenwick recently landed a technology job after a long search

By Donna Wares, NBC News contributor
Updated Sept. 7: More than three years into the recovery, the jobless rate remains persistently high at more than 8 percent, and the economy is creating new jobs at an anemic pace.

Yet even as the August employment figures show another month of modest job growth, there are jobs out there for those who know where -- and how -- to look.

Take Tom Fenwick, for example. After serving in Iraq, the former Marine finished college and went for his MBA at night school. He labored days at a trucking company. On weekends, he searched the Internet for a better job, juggling his sleep-deprived life as a father of newborn twin girls.

Ambitious and tenacious, Fenwick applied online for more than 100 jobs over two years. He came up empty, but instead of giving up, he changed tactics. This summer Fenwick turned to his network on Twitter, where he heard about a local job fair sponsored by the Iraq and Afghanistan Veterans of America that brought employers and vets together.

Fenwick came away from the fair with two job offers he loved. He recently started in senior management at a technology sales company, just 15 minutes from his Chicago home.

“You can submit online resumes or job profiles until your fingers bleed,” says Fenwick, who completed his MBA in June. “You can dial the phone until your voice goes hoarse. Neither method will be as effective as meeting people in person, letting them see who you are."

The 36-year-old vet’s experience is a case study in how to navigate career change in a still-rocky employment market, where an updated skill set, a focus on growing industries, and personal networking offer the best odds of landing that job you seek.

What follows is a list of some of the 10 hottest industries for jobs over the next decade, as determined by NBC News based on government and private data. The hottest opportunities remain in the health care industry, where demand is fueled by new technology, new treatments, our increased longevity and the reality that bedside care is one commodity that just can’t be outsourced.

Technology, business, retail and service industries rank among the other fast-growing careers in the rapidly and profoundly changing American workplace, according to employment experts and the Bureau of Labor Statistics.

“The major trends are automation and offshoring. This has led to the 'hollowing-out’ of the workforce, meaning that middle-skill jobs are in decline, because they can be done either by computers or by cheaper offshore workers... (But) low-skill jobs, especially service jobs, and high-skill jobs are expanding,” says Laurence Shatkin, a workplace researcher and author of numerous career books, including “Best Jobs for the 21st Century.”

“One of the most important skills is the ability to learn, because in 10 years, many people will be using workplace technologies and business practices that barely exist now," he says. "And in 20 years, many will be working in jobs that don't exist now.”

If you’re considering a career change, these are some of the hottest and most promising areas for your hunt:

Software developers
Software developers, the creative minds behind the latest apps, games and digital tools, are among the most sought-after workers in a growing global tech industry. The unemployment rate among information technology workers is about half the national average at 4.4 percent, according to a Mashable report. Also in demand are many related tech occupations, such as Java developers, mobile developers, programmers, database administrators, information technology managers and computer systems analysts.

Software developers usually need a bachelor’s degree in computer science, software engineering or a related field, and strong computer-programming skills. The 2010 median pay was $90,530 a year. Demand for software developers is projected to grow 30 percent by 2020, according to the Bureau of Labor Statistics’ 2012 Occupational Outlook Handbook. Employers in some cities grapple with shortages of developers to fill them. Forbes magazine named Seattle as the top metropolitan area for tech jobs in 2012.

Health care
From unskilled medical aides to highly trained physicians, health care jobs remain recession-proof. A stunning statistic: The health care industry is expected to create 28 percent of all new jobs in the U.S. economy in coming years. “It’s the biggest industry we have and the fastest-growing,” Shatkin says.

Registered nurses remain among the hottest careers nationwide, with the median annual wage hitting $64,690 in 2010. Job openings for nurses are expected to soar 26 percent between 2010 and 2020, according to the BLS handbook. Close behind is demand for pharmacists, a field expected to grow 25 percent during the same period. This year pharmacist also ranked as the top-paying profession for women, approximately $99,000 a year, according to a Forbes report. Bonus: It’s also a career that pays well right out of college.

Squeamish about blood and germs? No problem. Shatkin notes that opportunities abound in health care sales, office management, bookkeeping, and billing and appointment making. The burgeoning area of electronic medical records is a great choice for those with some computer skills. Transferable skills can be as good as health-care training: Shatkin cites the example of a laid-off publishing industry copy editor who highlighted her wordsmith skills to land a job editing brochures that pharmaceutical companies send to physicians. “The industry is just so big it creates a lot of peripheral jobs,” he says. “It affects the whole economy.”

Meeting planners
Jobs for corporate meeting planners are taking off. These detail-oriented wizards make travel arrangements, find and book venues, create menus and orchestrate every last beat of themed events for company meetings and annual conventions that draw hundreds, even thousands.

Potential employers include corporations, trade associations, colleges, museums and nonprofit groups. Employment of meeting planners is expected to grow 44 percent by 2020, according to Labor Department researchers, who cite a global business marketplace as a driving force.

In 2010, event planners earned a median annual wage of $45,260. To land a job, it’s helpful to have a bachelor’s degree and a background in hospitality. Colleges such as George Washington University, University of North Carolina at Charlotte and the University of Massachusetts offer meeting planning certifications that help you learn about negotiating contracts, managing vendors, designing eco-friendly confabs and other essentials. Want more info? Visit the Professional Convention Management Association website. Just for fun: Check out BizBash.com, a daily glimpse of trendy event planning at the high end of the creative (and budget) scale.

The team behind a dozen parties, panels and lounges in Tampa and Charlotte are threw some of the biggest events of the RNC and DNC. But they didn't do it just because they like to have a good time.

Financial adviser
At a Genworth Financial Wealth Management conference in Laguna Beach, Calif., in February, industry leaders faced a paradox. Demand for their services has never been higher, thanks to aging baby boomers nearing retirement. But their own workforce is also nearing retirement in droves -- the average age for a financial adviser in the U.S. is 57. Bottom line: The profession needs fresh blood. The Labor Department estimates that employment of personal financial advisers will grow 32 percent from 2010 to 2020. To work as a financial adviser, you typically need a bachelor's degree. A master’s degree and certification can improve chances for advancement. (Read about how to become a financial adviser.)

Author Shatkin says the field is an excellent choice for career changers with a background in accounting, money management or more general business experience. The key to success is word-of-mouth referrals. “It’s a good place for people to go later in life,” Shakin says. “The gray hair actually helps you in that area. It gets you credibility.”

Online creative jobs
The conventional wisdom holds that tech heads rule the Web. But the tide may be starting to turn toward more creative types. Elance, a major jobs website that matches employers with contract workers, reported a dramatic increase in the number of online creative jobs in 2012. “For the first time ever the 'Creative Economy' is outpacing demand for technical talent,” Elance reports. “These findings show that companies are now looking for new ways to attract and engage customers.“

In its Global Online Employment Report in July, Elance notes, “More than 80,000 of the new jobs posted in Q2 were in the Creative category, up 60 percent over a year ago. Demand for creative skills such as web design (+574%), voice acting (+295%) and content writing (+256%) were each up significantly over a year ago.”

Donna Farrugia, executive director of The Creative Group in Los Angeles, says she sees these same hiring trends at her staffing firm, noting that 11 percent of the employers she works with say they are hiring during the third quarter of 2012. Web design is one of the most often-requested skill set among clients, she says. “As business picks up and creative teams and agencies take on more projects and clients, employers recognize a need to bring in extra support,” Farrugia says, “They are filling full-time positions that were eliminated during the downturn and hiring freelancers to access specialized skills and help with heavy workloads.”

Social media marketing
Workplace researchers forecast strong demand for public relations specialists (23 percent growth) and marketing pros (14 percent) in the decade ahead. Demand has exploded for social media marketers who can help companies tap Twitter, Facebook, Pinterest and whatever comes next to tell their stories and connect with consumers.

Jobs boards are full of postings for social media managers and related positions in many industries. Salaries and job descriptions vary. But social media jobs generally require strong communication, customer service and organizational skills, plus the ability to implement social media strategies across various platforms and then measure their success, says Farrugia of the Creative Group.

“We see continued demand for creative professionals with extensive digital skills, and finding these individuals can be hard,” she says. “In fact, more than half (51 percent) of executives surveyed for our Hiring Index said it’s challenging to find skilled professionals today, up 10 points from last quarter.”

Dan Schawbel, author of “Me 2.0,” says social media marketing is a field where your resume is less important than “what the Internet says about you.” Job candidates need a professional online presence that demonstrates an understanding of social networks, online content and search engine optimization. “If you can’t do it for yourself, in a business sense, then you can’t do it for someone else.” says Schawbel, managing partner at Millennial Branding, a Gen-Y research and management consulting firm in Boston.

Personal trainers
This health-related career is a good choice for sports and fitness buffs. There’s a double benefit: you’ll boost your daily exercise and also work in a fast-growing field with opportunities for full-time work or flexible part-time positions.

Employment of fitness trainers and instructors is expected to grow by 24 percent by 2020 as more businesses and insurance companies recognize the benefits of fitness programs, according to Labor Department researchers, The median annual wage of fitness trainers and instructors was $31,090 in 2010. Salaries vary depending on employer, location, industry and experience levels; in-demand trainers command far higher salaries and hourly rates in many cities.

In a June 2012 report, the International Health, Racquet & Sportsclub Association noted a growing demand for personal trainers, as well as increased employment for yoga, Pilates and group exercise instructors. No degree is required for personal trainers, though many gyms and spas require certifications. You can find information about training and certification from the National Academy of Sports Medicine and the American Council on Exercise.

Post-secondary teaching
We’re not talking Harvard or Stanford, but there is a growing need for adjunct professors and other instructors who can teach career-related courses at community colleges, adult-education programs and for-profit universities. More American workers are seeking new skills, either by choice or by necessity after a job loss, and community-based classes are filling the void with practical, high-demand courses on subjects such as computer programming, web design and food-service management.

Instructors are needed for degree or certification programs, and for creative offerings teaching digital photography or crafts. Employment of postsecondary teachers is expected to increase by 17 percent by 2020, according to the Labor Department. Academic positions typically require at least a master’s degree, though some vocational programs accept work experience as a substitute. “A lot of people from many different backgrounds can do this,” Shatkin says.

Construction 2.0
Battered during the recession, the construction industry is rebounding as housing starts have reached their highest levels since 2008. Employment in construction-related work is projected to rise 33 percent by 2020, adding about 1.8 million jobs, according to the Labor Department.

Consider adding new skills to stand out from the competition. For example, workers can head back to the classroom or online to train as a green-building specialist, a certification offered through the Leadership in Energy and Environmental Design (LEED) organization. “States, counties and cities are offering incentives for green building projects,” notes author Kerry Hannon in her upcoming book, “Great Jobs for Everyone 50+.” Another option is create a niche as an aging-in-place specialist who remodels homes to make spaces comfortable and accessible for people as they age. The National Association of Home Builders offers certification courses in green construction and aging-in-place remodeling and other specialties.

Nonprofit jobs
Here’s good news for job hunters who want to change the world: For the second year in a row, an industry survey by Idealist.org reveals a healthy employment picture at U.S. nonprofit organizations. The 2012 survey shows nearly half of nonprofits plan to make new hires this year, and 54 percent say they will offer salary increases (up from 47 percent in 2011). Nearly one-third of nonprofit applicants are over 50, and a quarter of them have more than a decade of experience in the nonprofit world. Idealist Editor Allison Jones blogs about the findings, offering this advice for job seekers: “Given your experience and needs, it’s even more important that you are searching for organizations that are a good fit.”

That’s how Jason Hansman, who served in the U.S. Army from 2000 to 2009, found a new career in New York. After being unemployed for four months, then underemployed as a security guard for nine months, Hansman applied for a job with the Iraq and Afghanistan Veterans of America group. Now he works as membership director for the nonprofit, which hosts job fairs – including the fair former Marine Tom Fenwick attended in Chicago -- and provides other services for 145,000 vets nationwide. He spends his days working with fellow vets to help them find jobs, often in government and tech-related fields.

Read More

Economy is running neither hot nor cold

10:00 AM economy, neither, running No Comments

By NBC News staff and wire reports
The economy tossed up more mixed signals Thursday, continuing a pattern of lukewarm performance that could play into the hands of the Republicans as they assail President Barack Obama's record on the economy.

While consumer spending took its biggest jump in five months as the third quarter got started in July, jobs remained a dark cloud. New claims for unemployment benefits were flat in the latest week, suggesting that hiring is still struggling to pick up momentum.

Recent data on housing and retail sales suggest the economy fared better early in the third quarter but was not strong enough to take additional monetary easing by the Federal Reserve off the table.

"The economy does not seem to be faltering or going into reverse," said Chris Rupkey, an economist with Bank of Tokyo-Mitsubishi in New York. "But for a Fed that thinks the economy is not good enough, the economic data today is not consistent with 3 percent-plus growth or a falling unemployment rate."

Thursday's reports on the economy came as former Massachusetts Gov. Mitt Romney was getting set to accept the Republican Party's official nomination at the convention in Tampa, Fla., Thursday night. Romney has been touting his business experience as he tries to unseat Obama in the White House.

The Labor Department reported that seasonally adjusted initial claims for unemployment benefits were an unchanged 374,000, higher than the 370,000 that economists had expected. The four-week moving average, which smooths out wrinkles in the data, rose 1,500 to 370,250.

Jobless claims have risen by 10,000 in August, suggesting some moderation in the pace of job growth this month after payrolls increased 163,000 in July after a slim 64,000 gain in June.

The state of the labor market, particularly the unemployment rate, could determine whether the Federal Reserve will offer additional monetary stimulus to the economy at its Sept. 12-13 policy meeting. Economists are divided on whether the Fed will announce a third round of bond purchases to spur faster economic growth.

The unemployment rate, which ticked up to 8.3 percent in July, has been stuck above 8 percent for more than three years, the first time this has happened since the Great Depression.

Although housing and retail sales data suggest that economic activity picked up early in the third quarter, business spending is weakening and inflation is slowing.

On the bright side, the rise in consumer spending perhaps provides a glimmer of hope for the economy over the next few months.

"The improvement in spending activity suggests that overall economic activity may be off to a fairly decent start in the third quarter," said Millan Mulraine, senior macro strategist at TD Securities in New York.

The Commerce Department said on Thursday that consumer spending increased 0.4 percent in July after a flat reading in June. Last month's rise in consumer spending, which accounts for 70 percent of U.S. economic activity, was in line with economists' expectations.

When adjusted for inflation, consumer spending increased 0.4 percent, also the largest increase since February. Real consumer spending dipped 0.1 percent in June and last month's increase was an encouraging sign after consumption growth slowed by the most in a year in the second quarter.

The mixed data doesn't make the Fed's decision-making any easier, however. Fed Chairman Ben Bernanke is heading for Jackson Hole, Wyo., where he is scheduled to give a speech Friday that many hope will provide clues about whether the Fed will do more to aid the sluggish economy.

Reuters contributed to this report.

Read More

Fed says economy grew slowly in July

12:30 PM economy, fed, July, slowly No Comments

WASHINGTON -- The U.S. economy continued to grow gradually in July and early August, but manufacturing activity was softening in many areas of the country, the Federal Reserve said on Wednesday.

In its Beige Book report of anecdotal information on business activity collected from contacts nationwide, the U.S. central bank said retail activity, including auto sales, had picked up since the last report.

"Reports from the twelve Federal Reserve districts suggest economic activity continued to expand gradually in July and early August across most regions and sectors," the Beige Book said.

The economic snapshot was prepared for use by Fed officials at their upcoming policy meeting on Sept. 12-13, when policymakers will debate whether further central bank bond purchases are warranted to spark a stronger recovery.

The economy grew at a 1.7 percent annual rate in the second quarter, supported by exports and investment in the construction of nonresidential structures. The pace was a slowdown from the 2.0 percent rate set in the first quarter.

The Beige Book captured the beginning of the third quarter and suggested the speed of the recovery was falling short of what was needed to spur faster hiring. "Most districts reported that employment was holding steady or growing only slightly," the Fed said.

It also noted that manufacturing was softening in many districts, matching findings from recent regional factory surveys. Much of the slowdown is blamed on weak demand overseas, especially in Asia.

"Many districts reported some softening in manufacturing, either a slowdown in the rate of growth or a decline in the level of sales, output or orders," the Fed said. "Across the districts, few manufacturing firms reported any major hiring or layoffs."

Copyright 2011 Thomson Reuters.

Read More

Growth rate of the U.S. economy slowed in the second quarter

10:30 AM economy, growth, quarter, second, slowed No Comments

By NBC News staff and wire reports
The US economy grew up to the slowest pace in nearly a year between April and June as consumers and businesses concerned about jobs, wages, Washington and Europe died from a raft.

The Commerce Department reported that gross domestic product expanded pace from January in the second quarter, after rising to a 2.0 percent revised upwards to March at an annual rate of 1.5 percent. Output for the fourth quarter increased by 3.0 per cent to 4.1 per cent.

The growth rate in the second quarter, the expectations of economists was, was the slowest since the third quarter of 2011. It solves a major hurdle for President Barack Obama like him for reelection in November against the Republican challenger Mitt Romney battles. With only a few months until the election left voters already form strong opinions about the economy, may be hard to shake that before they get in the voting booth.

"The economy fights to keep level", said Robert dye, Chief Economist at Comerica in Dallas.

Consumers spent at the lowest speed in a year when they again reduced, purchase helped car, economic growth in the previous two quarters.

Shoppers are spending in an economy, which is not yet fully by the financial crisis and the recession late 2007 to mid-2009 with the nation, unemployment rate of 8.2% has recovered. This reluctance reflected in each of the last three months in the retail sales, closed. Also wages stagnate since years undermines the willingness of consumers to spend.

The economy needs a growth rate of at least 2.0 to 2.5, which prices stable, let % only to employment than whittling down to keep it.

The weak growth report, characterised by weak data of employment to manufacturing, can expectations in a third round of bond purchases, known as quantitative easing by the Fed raise.

The Fed has injected already $2.30 trillion into the economy through asset purchases and overnight interest rates close to zero, leaving some economists worry to make that the Fed left not enough applications, has his Kit.

No major political announcement is expected at the Fed next week, but many economists now say two-day meeting could move the Central Bank if policy makers on September 12-13.

Last month the Fed extended a program to the bonds re-weight, which already holds it in the direction of the longer dated borrowing costs.

The economy was by ensure deep Government spending cuts and tax increases, the expected early 2013 kick in hit, as well as problems of the debt crisis in Europe.

The biggest factor that is at rest with a weight of fear that politicians in Washington not in the position, is to avoid the so-called tax cliffs at the turn of the year, said economists.

Current economic data suggest to limited area for growth in the third quarter again on its feet.

Wall Street and Washington Watch consumer spending closely because it accounts for more than two-thirds of the U.S. economy. Structures.

Reuters contributed to this report.

CNBC Rick Santelli breaks the latest economic data on the gross domestic product of the country, with Joel Naroff, President of Naroff Economic Advisors.

Read More

Slowing economy can force fed to act

4:00 PM economy, force, slowing No Comments

Win Mcnamee / Getty Images

Fed Chairman Ben Bernanke testifies before the Joint Economic Committee on Capitol Hill earlier this month.

With the dark cloud Europe's current financial crisis still hangs of the financial system of the world opened the Federal Reserve a two-day meeting Tuesday with speculation swirling that politicians could announce more stimulus to boost the U.S. economy.

A decisive Greek choice over the weekend makes it easier to fears of a looming financial disaster in the eurozone victory new democracy, to leave a centre-right party, which remain supported, Greece in the Monetary Union. This means that now at least investors stop can thoughts about the market chaos that left a Greek decision of the euro zone would follow.

Now sets the focus on the fed and how it could play his next hand.

Recent reports, including two straight months weak employment growth, suggest that economic growth is slowed down again after a tepid recovery. The stage for Fed Chairman Ben Bernanke central bankers that will approve more impetus, to questions although the possibilities are limited. In testimony said in this month is to be the Fed Bernanke if necessary provide.

Opinions are divided about what the Fed will do.

Some economists expect that extend makers "Operation twist", a program launched in last fall that the composition of government bonds by the Fed of Sportwetten assets for long-term investment kept fits. The idea is, push down long-term interest rates, making it easier for businesses and consumers credit to get. The program is June 30 expire, although the Fed could decide, beyond at this point.

Others hope program, known as "quantitative easing", QE, in which the Fed essentially prints money for long-term mortgage or Government bonds to buy for something stronger, such as an other massive bond buying.

That would be controversial, because previous efforts had a questionable success rate and it runs the risk of inflation down the road because it increases the money supply. Also, economists say the Fed is expected to want something in his arsenal to abide, if the Economic Outlook further deteriorated in the course of the summer.

Richmond Fed President is an extension of "operation twist" probably first step after Al Broaddus.

"I think if there is a significant risk and action is required, they have to do something this week" Broaddus told CNBC. "My guess is that it is some sort of change the operation twist."

He said that the focus of the meeting would be domestic U.S. conditions with some discussion of the eurozone crisis.

Barclays Capital strategist Alan James and Edmund Shing expect an extension of the Fed operation twist, weakness in manufacturing output and consumer sentiment on.

"The soft patch in U.S., holds major economic data" she wrote in a research note Monday.

The only other options open for the Fed is adjusting the interest rates which are already at record low levels close to zero. In January, the Fed said that it plans hold to get prices until the end of 2014 to the economic recovery. The Fed would have to signal that she is planning to hold prices even further in the future now.

The worsening debt crisis in Europe and fears whether Congress will keep in the year 2013-on tax increases and Government, the cost-cutting measures,-also known as the "fiscal cliff"-should start on the trust of consumers and the economy, with a weight of are.

Evidence that Europe's fear of the investors suffer, have a negative impact on the US economy will be, yet not long finished were seen Monday in the Spanish borrowing costs, with 10-year bond yields rose beat 7.30 percent-the highest in the euro area history and forces of the movement, the other struggling eurozone Nations to seek an international bailout.

Yet the unrest in Europe said not too much should factor in the Fed plans this week Dino Kos, a former Vice President New York Fed. Weakness in Europe should already be included in the Fed forecast, he told CNBC.

"It really affect their thinking should not although the situation become still worse," he said. "Is the way it should impact the European slowdown affects US growth on their thinking, and comes up to such a degree then the growth, they need to deal with it?"

Kos said that the best position for the Fed this week would be fire, keep the possible negative consequences given the fiscal cliff.

"Do you want the Federal Reserve have some reserve?", he said that there are many uncertainties in connection with the fiscal cliff, given the timing, and the uncertainty of what will be the political situation at the end of the year.

"I would say that they should wait," he said.

Reuters contributed to this report.

Read More

Congress steering economy toward a 'fiscal cliff'

3:00 PM cliff, Congress, economy, fiscal, steering, toward No Comments

Jason Reed / Reuters

Watch that fiscal cliff. Fed chairman Ben Bernanke departs a news conference following the monthly two-day meeting at the Federal Reserve in Washington, April 25, 2012.

By John W. Schoen, Senior Producer
Fed Chairman Ben Bernanke calls it the “fiscal cliff.” It might be better thought of as the next economic Armageddon.

Unless Congress acts to soften the blow, economists are warning that a looming year-end collision of massive, “automatic” cuts in federal spending and the expiration of sweeping Bush-era tax cuts could crush an already weak U.S. economic recovery.

And unlike the central bank’s response to the Panic of 2008, the Fed would be powerless to offset the catastrophic impact on the economy and financial markets.

"There is absolutely no chance that the Federal Reserve would be able to have the ability whatsoever to offset that effect on the economy," Bernanke told reporters Wednesday, following a two-day meeting of the Fed's policy-making committee.

The risk of a potential economic train wreck stems from a series of contentious political decisions that Congress has been ducking for years, postponing a long list of tough choices until the end of the year, until after the national elections.

Now, unless a compromise is reached, sharp cuts in federal spending will remove hundreds of billions of dollars from the U.S. economy, virtually overnight. At the same time, American consumers will see a massive increase in taxes that will sharply curb their spending power, taking another big bite out of the economy.

While it was ducking those big decisions, Congress has also punted on a series of smaller budget measures that will have to be decided by next year. Taken together, they add up to some big numbers.

The lists includes two long-running budget items that have become a popular perennial target of political horse trading. One is the now-annual "fix" to scheduled cuts in Medicare payments that would reduce spending on doctors' fees by as much as 30 percent. The other is a so-called "patch" required to prevent the Alternative Minimum Tax from hitting an ever-wider swath of middle class households.

Wage earners are also set to lose the payroll tax cut that expires at the end of this year. An extension of long-term unemployment benefits is also set to expire, which would further slash the amount of money flowing through the economy.

Economists and budget analysts have offered up various estimates on just how badly the economy would be damaged if Congress fails to act in time. The combination of the tax increases and spending cuts would amount to more than $6.8 trillion over 10 years, according to the Committee for a Responsible Federal Budget, a non-partisan think-tank whose board includes former members of Congress and budget directors.

The Congressional Budget Office predicted earlier this year that the full impact of those tax hikes and spending cuts would remove about 3.5 percent of gross domestic product, more than wiping out the current recovery. That would send the unemployment rate, which stood at 8.2 percent in March, to 8.9 percent by year-end and 9.2 percent at the end of 2013.

Some economists argue the hit to GDP could be even greater. Morgan Stanley economist David Greenlaw figures the hit from the fiscal cliff would amount to more like 5 percent of GDP in 2013.

Others, like Deutsche Bank economist Joseph LaVorgna, think those estimates are overblown, though his assessment assumes Congress gets its act together and steers away from the cliff at the last minute.

But there's widespread agreement that if lawmakers ultimately pull a "Thelma and Louise," the economic impact of these tax and spending changes would be devastating if they hit all at once.

As Congress quibbles bitterly over how to cut the federal deficit, lawmakers generally agree that failing to do so would have dire long-term consequences. But, as Bernanke told the House Oversight Committee in March, balancing the budget abruptly would be even worse.

"It is important to achieve sustainability over a longer period," he told the panel. "One day is a pretty short time frame."

Perhaps even more worrisome than the scheduled "cliff" in federal taxing and spending is the timetable lawmakers face to prevent the worst-case scenarios from playing out. Given the potential changes in party leadership for both Congress and the White House, chances appear slim to none that any decisions will be made until after the November elections. That leaves Congress and the White House roughly eight weeks - punctuated by the Thanksgiving, Christmas and New Year's Eve holidays - to prevent the economy from falling off the cliff both sides have created.

The deadline could be even tougher to meet if, as some are warning, the government runs out of borrowing authority in the middle of that eight-week window.

Though the exact timing is difficult to predict, the next expiration of the current debt ceiling will likely spark another round of brinksmanship reminiscent of last August, when Congress and the White House narrowly quelled a rebellion by House Republicans bent on forcing the U.S. Treasury to default on its debt. That compromise produced the "automatic" $1.2 trillion spending cuts set for early next year.

"Finding a clever way to kick the can down the road again is becoming a bigger and bigger challenge," Princeton University economist Alan Blinder wrote in a recent Wall Street Journal OpEd. "And Congress has barely coped with previous such challenges."

What do you think of the "fiscal cliff"? Let us know on Facebook.

CNBC's Steve Liesman discusses the statements made by the Federal Reserve on Wednesday and whether QE3 is ahead.

Read More