Another weak jobs report: The only thing good to say about June's numbers is that they generally matched estimates, so at least there hasn't been any panic on Wall Street. But the report basically stinks. Payrolls dropped by 62,000 after a 62,000 drop in May. The jobless rate was unchanged at 5.5 percent. "It's really a weak labor market," Credit Suisse analyst Kathleen Stephansen told Bloomberg Radio. "When you look at the details it seems as though there is no redeeming factor here." One economist calls it a "slow-motion recession," which sounds about right. Here are stories from Bloomberg and the WSJ. The NYT puts it this way:
The job cuts came across a range of industries, affecting bankers, construction workers, and manufacturers. The report is the latest signal that the nation is struggling with one of the worst downturns in a generation. As job losses mount, even those still on payrolls have felt the pain: employers are cutting hours for their full-time employees and shrinking salaries just as workers face record-high prices for gasoline and food.
Stocks are zig-zaggin': The market was up in the first few minutes of trading, perhaps because traders expected the jobs report to be even worse. Also, the dollar was up and oil was down. Then it was back in minus territory and now the Dow is up again. Perhaps the best news this morning is that it's a holiday shortened session (volume is thin).
SAG update: No new talks are scheduled until Monday between the Screen Actors Guild and the studios and networks. Supposedly, SAG wants more time to study the offer made on Monday by the Alliance of Motion Picture & Television Producers. On Tuesday, the results of the AFTRA ratification vote are expected to be announced, at which point the SAG leadership could be forced into capitulating. From Variety:
SAG insiders have maintained that if the AFTRA vote passes by a relatively small margin, it will strengthen SAG's hand in seeking a better deal than AFTRA's. But a Hollywood labor official asserted that SAG has put so much effort into defeating the AFTRA deal that it won't gain any leverage if the pact's ratified -- as is widely expected. "The final offer from the companies may not be completely final, but it's going to be damn close," the insider added. "And with the economy going into a recession, SAG's not going to be able to persuade its members to go on strike."
Ports update: The refusal by the dockworkers union to extend its contract until a new agreement can be reached has port operators nervous. The concern is that the International Longshore and Warehouse Union might resort to work slowdowns. The union's most recent contract expired Tuesday after months of negotiations. From the FT:
The most contentious issue in the ports is likely to be the role of new technology. Many ILWU members currently have highly-paid jobs as clerks checking containers or in other roles that ports elsewhere in the world have abolished through using better technology. The ILWU has persistently resisted the introduction of technology it believes threatens jobs.
Schumer gets reamed: Federal regulators were none too pleased with the NY senator expressing his concern "that IndyMac's financial deterioration poses significant risks to both taxpayers and borrowers." In the banking biz, that's shouting "Fire" in a crowded theater. And besides, how did Schumer know this? John M. Reich, director of the Office of Thrift Supervision, told Schumer that "Dissemination of incomplete or erroneous information can erode public confidence, mislead depositors and investors, and cause unintended consequences, including depositor runs and panic stock trades." Of course, let's not forget that IndyMac was trading at just over a buck a share before Schumer's letters. Tom Petruno at Money & Co. has the details. "Which Way L.A.": I talked about IndyMac on last night's KCRW show. Here's the link.
Ground beef returns: Ralphs markets were restocking after clearing out previous supplies of ground beef that were linked to reports of E. coli illnesses. Kroger Co., parent of Ralphs, first pulled the meat from its stores in the Midwest, where the E. coli cases were reported. It expanded the effort on Tuesday. The new ground beef came from a different supplier. (LAT)
Album sales plunge: CDs accounted for much of the 11 percent drop for the first six months of 2008. Downloads, however, posted a 34.4 percent increase, to 31.6 million units. The top-selling album at midyear was rapper Lil Wayne's "Tha Carter III." (Billboard)
Worrries at Condé Nast: So much for defying the drops in advertising seen elsewhere. The three big titles - Vogue, Glamour and Vanity Fair - are all flat to down in the first half. Only the smaller magazines, such as Bon Appetit or Architectural Digest, are up. Retailers do most of their advertising in the final quarter, but there's concern that marketing budgets will stay tight through the end of the year. (NY Post)
New Century plan approved: The bankruptcy liquidation for what had been the nation's second-biggest subprime-mortgage lender will pay unsecured creditors up to 17 cents on the dollar. Those creditors say they're owed as much as $35 billion (Yow!). OC-based New Century filed for bankruptcy last year after state and federal investigations were launched and a bunch of shareholder lawsuits were filed. (Bloomberg)