Bob Williams, publisher of the Suburban Journals of Greater St. Louis, is leaving his position to become publisher of The Southern Illinoisan in Carbondale.
Both companies are subsidiaries of Davenport, Iowa-based Lee Enterprises Inc., which also owns the St. Louis Post-Dispatch.
Williams has been publisher of the Suburban Journals since 2007. Before that, he was Lee’s corporate director of sales and development and advertising manager for the Missoulian in Missoula, Mont. He spent a decade with Gannett Co. Inc. before joining Lee in 1998. Williams, who is married with four grown children, graduated from Brigham Young University with a degree in advertising paydayloans.
Greg Veon, Lee’s vice president for publishing, said Williams was selected after a nationwide search for a new publisher.
Williams will be replaced by Tom Wiley, a Lee executive now in charge of the Suburban Journals and Daily Journal in Park Hills.
The current publisher of the Illinoisan, Dennis DeRossett, is leaving the paper to become executive director of the Illinois Press Association.
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Mexico’s economy may expand more than expected in 2010 as the nation recovers from last year’s global slump, central bank Deputy Governor Manuel Sanchez Gonzalez said in an interview yesterday.
“Everything points towards the direction of a recovery,” Sanchez said in Sydney. While the central bank forecasts growth of 3.2 percent to 4.2 percent this year, “I’m ready to be surprised as to the results of the economic recovery,” he said.
Mexico’s $1.09 trillion economy was the worst performer in Latin America last year, shrinking 10.1 percent in the second quarter and 6.2 percent in the third quarter from a year earlier. Gross domestic product may expand “slightly” more than the government’s current 3 percent estimate this year, Deputy Finance Minister Alejandro Werner said Feb. 5.
Sanchez is among policy makers visiting Sydney this week to attend a symposium organized by the Reserve Bank of Australia to celebrate its 50th anniversary. The Basel, Switzerland-based Bank for International Settlements is also hosting a meeting of central bank officials in Sydney.
Global policy makers have to be “very careful” about how quickly they withdraw stimulus measures after cutting interest rates and boosting public spending to counter the deepest global recession since World War II, Sanchez said yesterday.
“There is a tradeoff between sustaining the stimulus measures and having some risks as to maintaining those,” he said. “You have a risk of withdrawing too quickly, of leaving those measures too rapidly, so that this recovery may be interrupted. You want to be very careful to maintain those stimulus measures for the right time.”
Inflation Outlook
Central banks also have to remain watchful of inflation and maintain price stability, he said.
“Every country has different situations as to the inflation prospects, but I’m confident also that the inflation pressures will continue to be relatively subdued in the near future,” Sanchez said.
Mexico’s inflation in December was 3.57 percent, the slowest since 2006.
The central bank kept the benchmark interest rate unchanged at 4.5 percent in January for a fifth straight meeting and warned that higher costs for state-controlled goods such as gasoline may fuel broader price increases. The latest monetary policy position is consistent with the central bank’s growth forecasts, Sanchez said.
The region’s second-largest economy probably shrank about 7 percent in 2009, the most since 1932, the central bank estimates.
“I’m very optimistic about the prospects of the Mexican economy in the short term and long term,” Sanchez said. “We had a very harsh recession last year. We’re going to have a very important improvement relative to the base we had last year.”
The fourth quarter probably showed “very good dynamism of economic activity” and the unemployment rate has declined, Sanchez said.
In his State of the Union speech Wednesday night, President Obama touted a slew of federal initiatives aimed at stimulating small business hiring and growth. Again.
Small companies employ around half of America’s workers and drive most of the country’s job growth. Obama talks frequently in his speeches about the vital role small companies play, and his administration has launched several efforts to bolster struggling Main Street businesses. But most of the president’s small business proposals remain in limbo, caught in bureaucratic logjams and the Great Black Hole of Congress.
A year ago, Obama set the stage during his first major economic speech to Congress. "I will not spend a single penny for the purpose of rewarding a single Wall Street executive, but I will do whatever it takes to help the small business that can’t pay its workers or the family that has saved and still can’t get a mortgage," Obama said in February. "That’s what this is about. It’s not about helping banks; it’s about helping people."
But small business owners across the nation say they feel left out of the stimulus and recovery action.
"Basically, it seems to me that Washington’s efforts have been to help Wall Street, not Main Street," said Kim Griebling, president of Custom Flag Company in Westminster, Colo. Griebling and her father bought the company in 1998 and now employ a staff of eight. As the economy deteriorated, so did the demand for flags.
Griebling applied in September for an America’s Recovery Capital (ARC) loan, an emergency financing program created as part of February’s stimulus bill. The program offers qualifying business owners a small, government-backed loan on very attractive terms, but those trying to land ARC loans face a gauntlet of administrative obstacles. While bailed-out financial giants like AIG got financing fast from Washington, business owners wait months.
"People don’t realize that $35,000 for a small business makes a huge difference. I am on the verge of possibly having to lay off people," said Griebling. Her loan was approved in December, but she hasn’t received the money yet — and her patience is wearing thin.
"I definitely pay attention, but I would say I am more skeptical," she says of politicians’ talk of helping small companies like hers.
Geoffrey Zeamer, the owner of scientific instrument maker Abbess Instruments in Holliston, Mass., also feels that small companies are being overlooked.
"I listen very carefully and on a daily basis as to what is going on, and I have found the last year extremely disheartening because everything is going to banks," Zeamer said.
Zeamer is an engineer who has owned his 17-employee company since 1982. He thinks the government got it backward by funneling money to banks to save the economy.
"If the government really wanted to stimulate business, then you give out orders. You order more planes, trains, you buy more bridges. If you give banks money, they look out and say, ‘nobody has any orders, we are not going lend out,’" said Zeamer. "That seems to have escaped them. I think it’s Basic Economics 101."
Here’s a rundown on where President Obama’s small business proposals from throughout the past year currently stand:
Tax credits for jobs: The government’s economists estimate that small businesses have created 65% of America’s new jobs over the past 15 years. In December, Obama delivered a speech at the Brookings Institution in which he endorsed tax breaks to encourage small businesses to hire.
But there’s a blizzard of competing proposals for what form those incentives should take, from a temporary payroll tax holiday to per-worker tax credits for new hires, and none have yet gained momentum in Congress.
In the same speech, Obama backed a trifecta of tax cuts intended to spur small business investment and capital spending. Congress hasn’t yet taken significant action on any of them.
TARP for community banks: Small businesses are still struggling to access the capital they need for their day-to-day operations.
"When you talk to small business owners in places like Allentown, Pennsylvania or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they are mostly lending to bigger companies," Obama said Wednesday. "Financing remains difficult for small business owners across the country."
In October, the President proposed a collaboration between the Treasury Department and the Small Business Administration to make capital cheaper for community banks that commit to increasing their small business lending.
Under the proposed plan, banks with less than $1 billion in assets would be able to borrow money from the government at a 3% dividend rate. That’s a discount on the 5% rate the Treasury currently offers borrowers through its Capital Purchase Program, a TARP (Troubled Asset Relief Program) initiative.
Three months later, the government is still drafting guidelines for the initiative.
Obama invoked the plan in Wednesday’s speech.
"I’m proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat," he said.
Loan limits: In the same October speech, Obama also threw his support behind Congressional efforts to raise the ceiling on SBA loans. Currently, the maximum loan size available under the SBA’s major lending programs is $2 million. Policymakers would like to lift that limit to $5 million.
Both houses of Congress have considered the measure, but they’ve failed to agree on legislation to enact it into law.
Bigger incentives for loans: Amid a slew of stalled initiatives, one program has seen success.
SBA-backed loans represent a tiny portion of the overall small business lending landscape, but they’re a vital lifeline for many new and growing companies. Last year, the SBA’s loan volume plunged.
February’s Recovery Act set aside a $375 million funding pool to temporarily eliminate fees for a SBA loans and increase the portion of each loan that the government guarantees, up to 90%. That move proved so popular that the money allocated for it ran out around Thanksgiving. Just before Christmas, Congress appropriated another $125 million to keep the incentives running.
The data shows that lending has rebounded from last year’s lows. In the three months ended Dec. 31, the SBA’s 7(a) program processed more than 12,000 loans totaling $3.8 billion. That’s a sharp pickup from the 9,070 loans, totaling $1.9 billion, the agency backed a year earlier.
NEW YORK — Wal-Mart Stores Inc. will cut about 11,200 jobs at Sam’s Club warehouses as it turns over the task of in-store product demonstrations to an outside marketing company.
The move is an effort to improve sales at Sam’s Club, which has underperformed the company’s namesake stores in the U.S. and abroad.
The cuts represent about 10 percent of the warehouse club operator’s 110,000 staffers across its 600 stores. That includes 10,000 workers, most of them part-timers, who offer food samples and showcase products to customers. The company also eliminated 1,200 workers who recruit new members.
Employees were told the news at mandatory meetings on Sunday morning.
"In the club channel, demo sampling events are a very important part of the experience," said Sam’s Club CEO Brian Cornell in a phone interview. "Shopper Events specializes in this area, and they can take our sampling program to the next level."
Shopper Events, based in Rogers, Ark., currently works with Wal-Mart’s namesake stores on in-store demonstrations. Sam’s Club is looking to the company to improve sampling in areas such as electronics, personal wellness products and food items to entice shoppers to spend more.
Sam’s Club has performed more poorly than Wal-Mart Stores Inc.’s namesake stores in the U.S. and abroad. Cornell has been working to improve results since taking the helm in early 2009, introducing new store formats, price cuts and offering more variety and more brands of items from take-home meals to baked goods.
As consumers eat out less in the shaky economy, Sam’s Club has tried to steal customers from grocery chains and rival warehouse stores such as Costco Wholesale Corp no fax payday loans. by offering more everyday goods such as food and health and beauty items and by paring its assortment of general merchandise such as furniture and clothes.
But in Wal-Mart Stores’ most recent quarter, revenue at the Sam’s Club division slipped nearly 1 percent to $11.55 billion while U.S. Walmart stores posted a 1.2 percent sales increase to $61.81 billion. Earlier this month, Wal-Mart Stores closed 10 underperforming Sam’s Club locations, resulting in the loss of about 1,500 jobs.
"Sam’s has been the relative laggard, and it has lagged relative to its direct competitors, Costco and the smaller BJ’s (Wholesale Club)," said Craig Johnson, president of retail consultancy Customer Growth Partners.
The move to outsource its food sampling efforts is a way for the company to tout its fresh food offerings in a cost-effective manner, Johnson said.
—"’Fresh’ is where the real competitive battles are being fought in the club sector," he said.
Shopper Events will launch a new demo program called "Tastes and Tips" with new carts, signs, uniforms and a trained team, said Cornell. He said the move was not made to save money.
"It’s not a cost-cutting measure, it’s really an investment in enhancing our demo program," he said. Cornell added that Shopper Events planned to hire "roughly the same number of people" cut, and said Sam’s Club workers are invited to apply for those positions.
Bank of America said late Wednesday it planned to return the entire $45 billion in bailout money it received from the government over the past year.
The move would allow Bank of America, the nation’s largest lender, to wriggle free from a variety of government restrictions it has had to abide by, including pay caps for its top executives.
It could also smooth what has been a difficult search for a new chief executive.
Outgoing CEO Ken Lewis is scheduled to depart by year end. Bank of America’s board of directors originally hoped to select a successor by Thanksgiving.
"We believe that this is good news, not only for the U.S. taxpayer and our company, but for the country as it is a milestone indicating that public policy has succeeded in helping our industry and the economy begin to recover," Lewis said in a statement.
The payback would be made largely through the sale of $18.8 billion of securities that would convert into common stock, according to the company. The stock sale will be put to a shareholder vote in coming months.
In addition, the bank said it would supplement the $18.8 billion with $26.2 billion in cash.
Last fall, as the government tried to stabilize the financial markets, Bank of America received $25 billion in aid under the Troubled Asset Relief Program, or TARP.
That number grew to $45 billion in the following months as the bank sought to cover losses it absorbed through its purchase of Merrill Lynch at the height of the crisis in September 2008 payday loan online.
There had been speculation earlier this fall that the company was exploring options to pay back part of the money it had received from the government.
But many believed that it would be at least several more months before the Charlotte, N.C.-based lender could get completely out from under the government’s thumb.
The move, of course, will save Bank of America from having to make any further dividend payments on aid it received from the government. So far this year, the company has paid out $2.54 billion to the Treasury Department.
But exiting TARP won’t come without a cost. The company said it would reduce its fourth-quarter results by $4.1 billion as a result. The company is expected to report a loss of $524 million in the current quarter.
Bank of America noted however, it did not plan to exercise its right to repurchase warrants, or rights to purchase company shares, owned by the government.
Bank of America (BAC, Fortune 500) shares finished more than 1% lower in regular trading Wednesday, but jumped more than 3% on the news after the bell.
The U.K. economy shrank less than previously estimated in the third quarter as consumer spending stopped falling and the service industries slump eased, bringing the longest recession on record closer to an end.
Gross domestic product fell 0.3 percent from the previous three months, compared with a prior measurement of a 0.4 percent drop, the Office for National Statistics said today in London. The result matched the median prediction of 28 economists in a Bloomberg News survey.
Prime Minister Gordon Brown this week called for stimulus to stay in place to avoid “choking off recovery” as an election looms within six months. The Bank of England has expanded its bond-purchase plan three times since March to ensure Britain’s escape from recession and Governor Mervyn King said yesterday the pickup isn’t “particularly strong.”
“Over the coming quarters the economy will accelerate pretty sharply,” said Nick Kounis, chief European economist at Fortis Bank Nederland NV in Amsterdam and a former U.K. Treasury official. “In third quarter the U.K. was one of the sick men of Europe but it’s going to step up a few gears and will be one of the stronger performers in Europe next year.”
The pound rose 0.8 percent against the dollar today and traded at $1.6704 as of 11:04 a.m. in London. The yield on the 2-year gilt fell 6 basis points to 1.16 percent.
Lagging Behind
The U.K.’s recovery has lagged behind that of the U.S. and the euro area, which have both returned to growth. Data yesterday showed Germany’s economic growth accelerated in the third quarter, while the U.S. economy expanded at a 2.8 percent annual rate, less than the government reported last month.
Brown is trying to revive the U.K. economy in time to defeat Conservative Leader David Cameron at the election, due by June. An Ipsos Mori poll in the Observer on Nov. 22 showed the Conservatives with a six-point lead, the least since December.
Consumer spending was unchanged in the third quarter, the first time it hasn’t dropped in 1 1/2 years. Government spending rose 0.2 percent, while fixed investment fell 0.3 percent, the statistics office said.
J Sainsbury Plc, the U.K.’s third- biggest supermarket owner, on Nov. 11 reported growth in first-half profit that beat analysts’ estimates. John Lewis Partnership Plc, owner of the namesake department stores and Waitrose supermarkets, said Nov fast cash advance loan. 22 that sales gained 15 percent in the week of Nov. 21.
Inventories fell by 4.1 billion pounds ($6.8 billion), the fourth consecutive decline. The slump in inventories is now the biggest on record, the statistics office said.
Services, Manufacturing
Officials revised up the GDP data because the decline in services output was smaller than previously estimated, at 0.1 percent instead of 0.2 percent. Manufacturing dropped 0.1 percent, up from the prior measurement of 0.2 percent.
Compass Group Plc, the world’s largest catering company, today reported full-year profit that beat analyst estimates. Lloyds Banking Group Plc, the U.K.’s biggest mortgage lender, gained in London trading yesterday after it announced plans to raise a record 13.5 billion pounds in the country’s biggest rights offering.
The Bank of England forecasts Britain will exit the recession in the fourth quarter. The economy will expand 2.2 percent in 2010 and 4.1 percent in 2011, according to policy makers’ projections published on Nov. 11.
Policy makers have cut the benchmark interest rate to a record low of 0.5 percent and pledged to buy 200 billion pounds in bonds to aid the economy. While policy maker Adam Posen told lawmakers that “one hopes that we are coming to the end” of the purchase program, King said he “can’t rule out” buying more assets.
Data ‘Surprise’
Policy maker Andrew Sentance said in a speech on Nov. 16 that the “surprise” gross domestic product estimate may be revised later, and told Bloomberg Television that “the broad balance of evidence is that the U.K. economy has started to grow in the second half of this year.”
Unemployment rose at the slowest pace in 18 months in October, retail sales climbed for a second month and the inflation rate increased more than expected, to 1.5 percent. The bank aims to keep inflation at 2 percent.
Banks are still working to shore up their finances after government-led bailouts of Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc during the 2008 financial crisis. Lloyds said yesterday it plans to raise a record 13.4 billion pounds in the country’s biggest rights offering.
Irish government workers will stage the biggest strike in at least three decades today in protest at plans to cut pay to contain the budget deficit.
Nurses, teachers and tax officials are among around 250,000 workers taking part in the 24-hour nationwide stoppage over what unions have said are “vicious” cost-cutting plans by the government, which is grappling with a deficit amounting to about 12 percent of gross domestic product.
Ireland, once Europe’s most dynamic economy, has been hit by a property crash and the global recession, eroding tax income and pushing the shortfall to 26 billion euros ($38.9 billion) this year. Finance Minister Brian Lenihan wants to cut about 4 billion euros from spending in the Dec. 9 budget to rebuild investors’ confidence after borrowing costs soared.
“Strikes will send the wrong signals,” said Alan McQuaid, chief economist with Bloxham Stockbrokers in Dublin. “If the international market sees the government standing up, they will see it as a good thing. There is a steely determination on the part of the government to do the right thing.”
The stoppage has been partially scaled back due to flooding in the south and west of the country after heavy rainfall. Hospitals and emergency service workers will maintain services in those areas, unions said on Nov. 22. The strike today will still close shut social welfare offices, passport offices and the public offices of the state tax authorities.
“The private sector has had to discount and cut costs, the public sector must respond,” said John Forde of Dublin- based Chambers Ireland, which represents 13,000 companies. “Hard decisions must now be taken to resolve this issue.”
Lost Rating
The difference in yield, or spread, between 10-year Irish securities and 10-year German bunds was at 150 basis points yesterday. While it’s narrowed since reaching 284 basis points in March, the spread remains five times wider than its average over the last decade. Ireland has also lost its top credit rating at Standard & Poor’s, Moody’s Investors Service and Fitch ratings this year.
The government said this month that the deficit will hit 14 percent of gross domestic product next year, almost five times the European Union limit, unless it takes action. It sees the economy, which doubled in size in the decade through 2007, shrinking 1.5 percent in 2010 after a 7.5 percent contraction this year.
President Barack Obama said he focused much of his recent week-long trip to Asia on exploring ways to increase U.S. exports and thereby create jobs.
Obama returned Nov. 19 from a trip to Japan, China and South Korea. In his weekly radio and Internet address, he said increased exports to those countries can help the U.S. recover from its highest unemployment rate in decades.
“Above all, I spoke with leaders in every nation I visited about what we can do to sustain this economic recovery and bring back jobs and prosperity for our people,” Obama said in the address, which was taped in Seoul. “Increasing our exports is one way to create new jobs and create new prosperity.”
The U.S. unemployment rate rose to 10.2 percent in October, the highest level since 1983. Obama said he will continue to focus “relentlessly” on creating new jobs.
The administration will host a jobs forum at the White House next month with business executives, economists, financial experts and representatives from labor unions to talk about government policies that can encourage job growth.
In today’s address, Obama said the administration won’t make any “ill-considered decisions” about spurring job growth because of the federal budget deficit, which reached a record $1.4 trillion in the fiscal year that ended Sept. 30.
Right Direction
Obama said the economy, which grew 3.5 percent in the third quarter, is moving in the right direction after government approval of a $787 billion stimulus package in February
“The steps we are taking are helping,” he said paydayloans. “And I will not let up until businesses start hiring again.”
Obama said his Asia trip was also marked by productive efforts to develop new clean-energy initiatives and progress in working with China to send a unified message to Iran and North Korea in opposition to the development of nuclear weapons.
In today’s Republican address, Senator Mike Crapo of Idaho said health-care legislation proposed by Senate Democratic leaders would increase insurance costs, taxes and government spending while reducing benefits.
“This is not true health-care reform and it is not what the American people want,” Crapo said.
The Senate is scheduled to take a rare weekend vote today on whether to begin debate on the $848 billion legislation, which is intended to cover 31 million uninsured Americans and curb medical costs.
Crapo said the measure would raise taxes by “nearly half- a-trillion dollars,” and cut hundreds of billions of dollars from Medicare, the government health-insurance program for the elderly and disabled.
Crapo said a better approach to health-care overhaul would be “step-by-step reforms” proposed by Republicans, such as letting consumers purchase insurance across state lines, allowing small businesses to pool together to purchase insurance for employees, and eliminating waste, fraud and abuse.
“These are the kinds of reform that make sense and would really make a difference for all Americans,” he said.
Russian consumers are benefiting from a stronger ruble that’s boosted incomes and offset tight credit while a lack of investment is hampering a rebound in manufacturing, a series of economic reports showed today.
Real disposable incomes posted the biggest jump in more than a year last month and retail sales rose from September, signaling consumer demand is returning following October’s 3.4 percent gain in the ruble against the dollar.
The economy of the world’s biggest energy producer is showing signs of recovery as a return of global demand for commodities supported exporters and domestic demand rebounded after the ruble gained to the strongest level this year. Russia’s record 10.9 percent economic contraction in the second quarter eased to an 8.9 percent decline last quarter.
“Household consumption is stabilizing after lagging behind the rest of the economy,” said Olga Naydenova, an economist at Otkritie Financial Corp. in Moscow. She expected a broader improvement in indicators last month as “people have learned to adapt to the changing situation, and budget spending on social needs also helped.”
The ruble lost 0.8 percent to 29.0506 per dollar at 4:22 p.m. in Moscow, paring its weekly gain against the U.S. currency to 0.6 percent. The ruble slid 0.5 percent to 35.3348 against the central bank’s target currency basket.
Retailer Gains
OAO Dixy Group, Russia’s third-largest publicly traded food retailer, added 4.62 rubles, or 2.1 percent, to 219.99 rubles in Moscow. The stock has gained 323 percent so far this year. The shares of X5 Retail Group NV and OAO Magnit, Russia’s two biggest food retailers, are up 234 percent and 274 percent in 2009, outperforming the 30-stock Micex Index, which has jumped 114 percent this year.
Disposable incomes climbed a monthly 6 percent in October and rose 3.9 percent compared with the same period last year, the biggest annual jump since September 2008, the Federal Statistics Service said. Retail sales rose 3.2 percent from September and declined 8.5 percent on an annual basis compared with a 9.9 percent drop the month before.
The government has made spending on social needs, including benefits and pensions, a priority of its stimulus program, which deployed 2.5 trillion rubles ($86.4 billion) to bolster the economy with tax breaks, loan guarantees and subsidies.
‘Too Early’
Service industries, which account for about 40 percent of the economy, rose for a third month in October, advancing to the highest since September 2008, VTB Capital said on Nov. 5, citing its Purchasing Managers’ Index.
“Although the economy is no longer declining, it is too early to speak of a recovery,” Alfa Bank analysts led by Ekaterina Leonova said in a Nov. 18 report. “Signs of improvement are still very fragile and do not constitute a trend.”
The ruble appreciated 3.4 percent against the dollar for its second consecutive monthly gain in October. Imports account for about 49 percent of the consumer goods sold in Russia, the government estimated last year.
A stronger currency has increased spending power for the domestic market as “it transfers incomes into people’s pockets,” said Clemens Grafe, chief economist at UBS in Moscow.
Wage declines also eased last month as exporters returned to profitability. Wages fell an annual 4.5 percent in October, compared with a 4.9 percent decline the previous month. Retail sales have fallen for nine consecutive months, the longest period of declines on record.
Manufacturing Slump
Rebounding consumer demand isn’t reflected in the country’s manufacturing sector. Russia’s industrial slump deepened in October as companies failed to build up inventories and credit remained tight even after eight central bank interest rate cuts since April.
Output in October fell 11.2 percent from a year earlier after the decline eased to 9.5 percent in September. Manufacturers are struggling to stay profitable as banks rein in credit, hampering investment even as demand picks up for commodities, Russia’s chief export.
“High interest rates and sharp ruble appreciation may have added pressure to the competitiveness of Russian goods,” said Anton Nikitin, an analyst at Renaissance Capital in Moscow. “In this environment, fourth-quarter GDP growth might be weaker than we previously thought.”
Shrinking output may spur the central bank to further loosen monetary policy, Nikitin said.
Bank Rossii is scheduled to hold a board meeting on Nov. 24 where a rate decision may be discussed, First Deputy Chairman Alexei Ulyukayev said yesterday.
The U.S. recession that began in December 2007 cost the top metropolitan areas all of the 2.29 million jobs they had gained in the previous expansion, according to a report released on Wednesday.
“All of the job growth that occurred in the top U.S. metropolitan areas from August 2000 through August 2007 was erased by the subsequent recession,” New York City Comptroller William Thompson said in a quarterly economic report.
The net loss is 7,000 jobs.
The two mature cities with the biggest job losses were Chicago, whose employers cut 257,700 workers, and Detroit, which lost over 467,400 jobs, the report said.
Boston lost 103,500 jobs, followed by Minneapolis-St. Paul, with a loss of 35,500 positions; St Louis, which shed 28,400 jobs, and Philadelphia, where 21,400 positions were lost.
But there were two upbeat notes in this sour trend.
In spite of the financial crisis on Wall Street and thousands of high-paying jobs lost after Lehman Brothers filed for bankruptcy in September 2008 and other banks merged, New York City emerged as part of a positive trend over the entire nine-year period covered by the city comptroller’s report.
The New York-New Jersey area was one of only two “mature metropolitan areas” that succeeded in increasing jobs from August 2000 to August 2009. The New York-New Jersey area added 95,700 positions over that nine-year period, according to the report from Thompson, a Democrat.
Baltimore was the other bright spot, chalking up a gain of 26,500 jobs in that nine-year period,
But in the last expansion, New York City underperformed Washington, D loans until payday.C., Baltimore and Philadelphia in increasing the number of high-paying professional and business services jobs that tend to face less of a threat from foreign rivals than manufacturing, for example.
FEELING WALL STREET’S PAIN
Although New York City fared better than some of its peers, the city comptroller’s report revealed the widespread devastation caused by Wall Street’s implosion due to the credit crunch and the stock market’s slide after the housing market’s bubble burst. A total of 40,000 financial jobs have been lost since August 2007. And the city’s jobless rate jumped to 10.3 percent in September from 6 percent a year-ago.
New York City’s fortunes rise and fall with Wall Street because banks and brokerages spur hiring in service sectors, from florists to law firms, during profitable years.
General sales-tax collections fell 12 percent in the third quarter from a year ago, while income taxes withheld from paychecks dropped 7.2 percent. Manhattan’s office vacancy rate shot up to 11.1 percent in the third quarter — the highest level since the 2004 third quarter, the report said, citing Cushman & Wakefield data.
How swiftly the city exits the downturn rests partly with Congress. The federal government’s newfound zeal for reining in Wall Street’s risk-taking and compensation could crimp the financial industry’s ability to kickstart the city’s economy.
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