More signs of a slowing in economic activity: job ads as measured by the ANZ Bank grew more slowly in March than in the previous month. The ANZ said total job advertisements on the internet and in newspapers increased 1.8% in March, to be 8% higher than they were last March (seasonally adjusted). Newspaper job ads were down by 1% from February while internet job ads rose 2% (seasonally adjusted). The slowing in the rate of growth came after increases of 19.1% in February and an 8.1% fall on January. February’s increase was the largest in the 11 years the ANZ has been monitoring job ads. Coming after falls in retail sales and in building approvals in February, the slowing in job ads underlines the feeling that the economy may have slowed a touch in the first quarter. Economists are expecting about 7000 new jobs to be reported in Thursday’s Labour Force data for March, with the unemployment rate remaining at 5.3%.
Boom, boom (again): Break out the fizzy stuff, the recession is over, jobs are being created, gold, oil, copper, nickel and rubber are burning their way higher, it’s the boom, it’s back. US pending home sales jumped sharply (because a government tax credit ends this month), but despite triffling details such as that, all the markets want to talk about is boom. US 10-year bond yields hit 4% overnight, the highest since last June and with a huge $US82 billion of bonds to be auctioned this week, there’s fears of another rise if those sales don’t go well. But the sale of $US8 billion of 10-year inflation-protected bonds went off overnight with solid demand. The sale of 10-year bonds on Wednesday night, our time, will be the big test.
Bankrupt Americans: The US jobs market rebounded in March, so did the number of Americans going bankrupt as the underside of the recession continues to bite. In fact more Americans filed for bankruptcy protection last month than at any time since America’s federal bankruptcy laws were revamped in 2005. There were 158,141 US bankruptcy petitions, covering consumers and businesses, filed in March, according to a report from court filings and released by Automated Access to Court Electronic Records, or AACER.
Bankruptcies surge: That’s up 20% from March 2009 and 35% from February of this year. In fact March’s filings were 19% above than the 133,393 recorded in October 2009, which was the previous high. March’s filings included 149,979 petitions by individuals and 8162 by businesses. Last year, there were 1.47 million bankruptcy filings, the most since a record 2.08 million were filed in 2005. Filings for individuals rose 32% to 1.41 million, and for businesses it rose 40% to nearly 61,000.
US jobs: Still the 162,000 new jobs last month and the extra jobs coming in revisions for January and February was good news. Not as good as some analysts who saw 200,000-300,000 new jobs being revealed. But it was the best in three years. The previous two months saw 62,000 extra jobs added in revisions. The hiring of census workers added 48,000 jobs in March, leaving private sector employment growth of 123,000. And netting out any weather-related affects, private sector employment growth averaged 66,000 over February and March. Unemployment remained at 9.7%. The US still needs 125,000 new jobs every month simply to match growth in the labour force. There could be more than 200,000 people hired for the census this month, which will skew the report in May.
US jobs: But as welcome as the jobs figures were, there were a couple of reminders of the continuing depth of the slump. Even though more full-time and part-time jobs were created, pay fell by two cents an hour, the first fall since 2006. A record 6.5 million people were out of work last month for longer than six months. With home foreclosures forecast to hit four million this year and no resurgence in home prices (and unemployment to be above 9% at year’s end, according to recent speeches by Fed members), where’s growth going to come from in America when the restocking rebound runs out of puff? Exports says President Obama and his cheer squad. To whom? China and India? Both starting to tighten monetary policy to rein in bubbles and inflation? Moribund Japan and Europe? America will do the usual and try and lure consumers into spending more. But savings are falling, most have stayed out of the sharemarket and wages are weak. In fact unit labour costs are falling in the US (as is inflation). US consumers won’t be able to afford very much except the necessities of life. Consumption is growing by 3% at the moment, but for how long? The number of credit cards in the US is down 20% in the past two years.
Giving away cars: Take US car sales. On the face of it, a good month in March. A 24.3% increase to an adjusted annual rate of 11.78 million units, up from the low 9.72 million in February. Sales for the first quarter were up 15.5% on the same quarter of 2009 (when they fell 30% and more some months). But the industry is not out of the woods. Toyota’s 40% plus lift in sales was driven by incentives to try and protect its market position after the millions of recalls and bad publicity about poor accelerators and brakes. Ford spent less on incentives, but offered them anyway. It will be more of the same this month.
Cutting their throats: The incentives were so generous from Toyota, government-owned GM, Ford the survivor and Chrysler the straggler, that you would be mistaken for thinking that the bad old days of late 2008 and early 2009 were back. Toyota’s rare offer of zero percent financing and up to $US3,000 cash back helped boost its sales by 40.7%. General Motors spent $US3519 per vehicle in incentives, down from $US4772 a year ago, which was a record high. Is profitability a stranger? Chrysler’s sales fell 8% because it can’t give away cars no one wants. Ford, with a solid new-car lineup lifted sales 30% on a year earlier.
Greek alchemy: Greece is a member of the eurozone and is supposedly a mature European economy. It is not an emerging economy such as China, Brazil, India or smaller economies such as Vietnam, Thailand or Argentina. And yet, a report in the Financial Times says Greece will be trying to raise up to $US10 billion of debt in the US next month and will market itself as an “emerging economy”. Disappearing economy more likely. Emerging economies are marketed as “growth” economies with rising returns and prospects. Greece has neither and the economy is contracting, not growing. So with interest in its debt falling in Europe, it and its advisers figure there’s a bunch of bunnies ripe for the plucking in America where memories are always shorter than anywhere else. What Greece really wants is lower interest rates on its debt. They will be priced off the 6%-plus it pays in Europe, which will help probable US investors who want high yields, not safety. The cleverer heads in the markets know that it will be 2011-2012 and not this year, when Greece’s problems worsen.
Check back to the Crikey website this afternoon for today’s RBA interest rate announcement…
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