The Sun's Financial Diary » Charts

October 2009 Unemployment Rate 10.20% – Chart of the Day

Sun — Sat, 07 Nov 2009 00:11:45 +0000

The economy has grown again, but the labor market showed no sign of improving. Actually, if you look at the the unemployment report released this morning, you will probably feel things are getting worse, not better.

In the latest job report, the government said that the nation’s monthly unemployment rate reached 10.20%, the highest level in more than 26 years. For a long time, we have been warmed that the unemployment rate may reach double-digit, but it seems that it came a little earlier than expected.

Despite the huge amount of money the government has spent to pull the economy out of the deepest recession in 70 years, the job market is still very weak. In October, U.S. employers shed 190,000 non-farm positions. The number of jobs lost in a month is the lowest so far in 2009, but the number of unemployed person increased 558,000 in October, pushing the total number of people without a job to 15.7 million. Since the recession began in December 2007, more than 8.2 million workers have lost their jobs.

The economy may be recovering (GDP grew 3.5% in the third quarter), but we probably won’t feel any real improvement until we all have jobs.

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October 2009 Unemployment Rate 10.20% – Chart of the Day

Dow Closed Above 10,000 for First Time in a Year – Chart of the Day

Sun — Thu, 15 Oct 2009 02:08:15 +0000

It was October 3, 2008 when the Dow Jones Industrial Average closed above the 10,000 level at 10,325.38. In the following five trading sessions, the widely watched index lost 1874.19, closing at 8,451.19 on October 10, 2008. Actually, October 3, 2008 was right in the middle of a steep plunge of the Dow. The index closed at 10,850.66 on September 30, 2008. Eight consecutive losing sessions cost the benchmark 2399. 47 points. That’s more than 22% in eight trading days, one of the worst declines of the index in its history. Since then, the Dow was in a downward spiral amid the worst recession since the Great Depression. The decline accelerated early this year when big banks like Citigroup and Bank of America needed billions of dollars taxpayer money to survive. On March 9, 2009, the Dow closed at 6,547.05, a bottom that we can call only when looking back at the history.

Though the Dow has gained 3,468.81 points since its March low, it is still more than 4,000 points off its peak reached in October 2007. But, as it has already happened, these shouldn’t be any doubt that the initial rally was real now.

The question is: Did you miss it?

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Dow Closed Above 10,000 for First Time in a Year – Chart of the Day

September 2009 Unemployment Rate at 9.8% – Chart of the Day

Sun — Fri, 02 Oct 2009 12:39:03 +0000

Despite signs that the economy has started to recover, U.S. employers continued to cut workers.

In the latest employment report released this morning, the Labor Department said nonfarm payroll shrank by another 263,000 in September, pushing the monthly unemployment rate to 9.8%, the highest level since June 1983.

In September, the employment in construction fell 63,000 while the manufacturing sector lost 51,000 workers. Since the recession began, employment in construction and manufacturing has fallen 1.5 million and 2.1 million, respectively. The only bright spot in this gloomy job picture is health care, which added 19,000 new workers to the payroll in September.

According to the Labor Department report, since the recession began in December 2007, the number of people without a job has nearly doubled, from 7.6 million to 15.1 million while the unemployment rate more than doubled.

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September 2009 Unemployment Rate at 9.8% – Chart of the Day

Federal Minimum Wage at $7.25/Hour – Chart of the Day

Sun — Fri, 24 Jul 2009 18:01:34 +0000

In case you forgot, today, July 24, 2009, the Federal minimum wage goes up to $7.25/hour from last year’s $6.55/hour.

Following is a plot of historical Federal minimum wages from 1939 to 2009 (the blue line). In 1939, the minimum wage was only 30 cents. The next adjustment didn’t come until 1945 when the minimum wage was increased to 40 cents. Since then the government has changed the minimum wage regularly, especially between 1968 and 1981, when the wage was increased almost annually. The longest gap was between 1997 and 2007. In 2007, the rate went up to $5.85/hour from $5.15/hour in 1997.

Also shown in the following plots are two inflation adjusted minimum wages (the inflation data is from Bureau of Labor Statistics): The red line is based the 1939 wage and the green line is based on the 1968 wage. As you can see, if the minimum wage is adjusted based the wage of 1939 (30 cents), then the actual wage is much higher than the inflation adjusted one (the wage would be $4.64 in 2009). However, if the wage is adjusted based on the 1968 wage ($1.15), then the inflation adjusted wage actually matches the real wage pretty well.

While the increase in Federal minimum wage will help millions of workers who earn minimum wages from their jobs, there are quite some debates on whether such an increase comes at the right time or not and whether it will help or hurt the economy. Supporters of the increase say that as many people are struggling to meet ends need in this deep recession, the increase will help millions to pay their bills and the wage raise will boost consumption thus help the economy. For people who say the increase comes at a really bad time, the argument is since many business owners have already been hit badly by the financial crisis and economic downturn, the increase in minimum wage can only put more burden on businesses which may reduce work hours or fire workers to lower cost, eventually hurting those people it intends to protect and the economy as well.

So what do you think? Does the increase in minimum wage come at a good time? Will it help or hurt the economy that has lost millions of jobs since the recession began?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

*Data sources: Bureau of Labor Statistics and Wikipedia.

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Federal Minimum Wage at $7.25/Hour – Chart of the Day

April 2009 Unemployment Rate 8.9% – Chart of the Day

Sun — Fri, 08 May 2009 13:39:22 +0000

The labor market is still weak, but there’s little hope that the situation may start to improve as the pace of job cut slowed in April.

The Labor Department reported today that U.S. employers trimmed 539,000 nonfarm jobs in April 2009, the smallest monthly decline since October 2008, after ADP data showed similar decline early this week. However, the household survey showed that the unemployment rate has soared a 25-year of 8.9% last month. March’s job loss rate was revised higher to 699K, the highest monthly job loss in six decades.

The Labor Department report showed that the total number of workers without a job reached 13.6 million in April, mostly in private-sector industries. Manufacturing is still the hardest hit sector with more than 149K job losses in April, followed by professional and business services industry, which lost 122K positions. Construction is still weak, with employment down 110k last month. Health care is the only sector that grew in April, with 17K new workers added to the payroll.

Since the recession began in December 2007, more than 5.7 million jobs have been lost.

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April 2009 Unemployment Rate 8.9% – Chart of the Day

February 2009 Unemployment Rate 8.1% Highest in 25 Years – Chart of the Day

Sun — Fri, 06 Mar 2009 14:50:37 +0000

The U.S. job market keeps weakening. According to the latest unemployment report released by the Labor Department this morning, U.S. employers slashed 651,000 nonfarm positions in February 2009, pushing the monthly unemployment rate to 8.1%, the highest level since December 1983. February marks the third straight month that job losses exceeded 600,000, the first time that happened since 1939. The monthly job losses of 651K are also the largest since 1949.

Household survey data showed that the total number of unemployed person increased by 851,000 last month to 12.5 million. In February, the professional and business service sector suffered the most job losses of 180,000, while employment in manufacturing and construction industry dropped 168,000 and 104,000, respectively. The financial sector, the source of this recession, saw employment declined by 44,000. The only sector that has created new jobs last month is heath care, where a total of 27,000 new jobs were added.

Since the recession began in December 2007, more than 4.4 million workers lost their jobs, with more than half of the job losses occurred in the past four months.

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February 2009 Unemployment Rate 8.1% Highest in 25 Years – Chart of the Day

Dow Jones Dropped to New 6-Year Low – Chart of the Day

Sun — Fri, 20 Feb 2009 03:43:14 +0000

Major stock indices dropped to new multi-year lows on Wednesday as financial, again, and tech stocks weighed on the market. At the close, Dow Jones Industrial Average lost 89.68 points to 7,465.95, breaking the November 20, 2008 low. The last time the Dow closed lower was on October 10, 2002 when the blue-chip benchmark was at 7,286.27, the bottom of the last recession after the dot-com burst. So far in 2009 the Dow has lost 1,310.44 points or 15%. Since reaching the all-time high of 14,164.53 on October 9, 2007, the Dow has surrendered 6,698.57 points, or 47.3%.

Despite the passage of the massive economic stimulus package and promises from the government to help millions of homeowners fight foreclosures, investors didn’t gain much confidence from the government’s plan to revive the economy and the housing market. The fact that the Dow dropped below its November low singles that the slump could continue. At the same time, the Labor Department reported today that nearly 5 million Americans now collect unemployment benefits.

Recovery? It won’t come any time soon.

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Dow Jones Dropped to New 6-Year Low – Chart of the Day

American Recovery and Reinvestment Act of 2009 Breakdown – Chart of the Day

Sun — Fri, 13 Feb 2009 21:21:14 +0000

The House has already voted to approve the $789 billion economic stimulus plan (called American Recovery and Reinvestment Act of 2009) President Obama has sought since he took office less than a month ago. The Senate will take on the bill later today and it could be sent to the President for his signature as soon as this weekend.

Early this week, I posted highlights of the stimulus package. But that post was based on data that some are no longer in the final bill, or have been changed a lot as the Congress wanted to keep the overall cost down. For example, first-time homebuyers can get $8,000 tax break instead of the $15,000 original proposed and approved by the Senate. Also tax cuts for couples have also been reduced to $800 ($400 for single) instead of 1,000. Even though details of the final bill will take some time to emerge, I was able to draw this pie chart based on this rough breakdown on Portland Channel 8 News.

The top 5 largest spending/tax cuts are:

Health Care: About $141.3 billion
New Tax Credit: About $116 billion
Infrastructure: About $89.7 billion
Education: About 87.3 billion
Energy: $86.2 billion

For most of us as taxpayers, we are more concerned about individual tax credits, such as for buying a home, purchasing a new car, and paying qualified college expenses, etc., in the stimulus plan because they are what we can directly benefit from. According to a publication by the CCH Group (PDF file), individual tax incentives in the American Recovery and Reinvestment Act of 2009 economic stimulus plan cover include:

Making work pay credit: $400 per worker and $800 per couple tax credits in 2009 and 2010 in the form of reduced paycheck tax withheld. The credit will phase-out when a single earner’s modified AGI is more than $75,000 or $150,000 for married couple filing jointly.
$250 economic recovery payment: Retired people on Social Security or veterans will receive a one-time payment of $250.
$8,000 first-time homebuyer credit: First-time home buyers will receive $8,000 tax credit when buying a home in 2009 and you don’t have to pay the credit back after 36 months.
AMT Patch: The income limits for AMT exemption for 2009 are $70,950 for joint filers and $46,700 for single.
New car purchase tax deduction: New car buyers will get an above-the-line federal deduction for state and local sales taxes or excise taxes on the first $49,500 of a car’s purchase value. The phase out income limit is $125,000.
American opportunity education tax credit: For 2009 and 2010, HOPE program will be enhanced to allow up to $2,500 tax credit be claimed against educational expenses. Phase-out begins for singles with $80,000 AGI or $160,000 for joint filers.
Qualified tuition programs: Withdrawals from 529 college savings account can be used to purchase computers and internet services.
Earned income tax credit: For 2009 and 2010, EITC will be increased to 40% of the first $12,570 of earned income.
Child tax credit: The income threshold of the refundable portion of child tax credit is increased to $3,000 in 2009 and 2010.
Unemployment compensation: For 2009, people who lost their jobs can exclude up to $2,400 unemployment compensation from their income.

Now that the stimulus plan is becoming a law, the Obama Administration wants to hear your opinion on the package. You can give The White House your feedback.

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American Recovery and Reinvestment Act of 2009 Breakdown – Chart of the Day

Stamps for First Class Mail to Increase to 44 Cents in May – Chart of the Day

Sun — Wed, 11 Feb 2009 03:37:34 +0000

Soon, it’s going to cost you a little more to mail that 1st class letter.

The USPS today announced the new prices for first-class mail. Effective on May 11, 2009, the postage of a one-ounce first-class mail will be 44 cents, up from the current price of 42 cents. Prices for other mailing services, such as Standard Mail, Periodicals, Package Services (including Parcel Post), and Extra Services, will also be adjusted. The USPS has already increased shipping costs early this year. While you can keep using Forever stamps that you bought early without being affected by the price change, it will cost you 2 cents if you buy a Forever stamp when the new price kicks in. It’s time to buy Forever stamps now if the USPS, as expected, keeps increasing mailing costs.

The Postal Service has changed the price of first-class stamps every year since 2005, with adjustments made based on Consumer Price Index. Using the historical inflation data from 1997 to 2008, I plotted the theoretical postage after the inflation (blue line) against the actual postage (red line) and they came out pretty close. Like the USPS claimed, “the average increase by class of mail is at or below the rate of inflation as measured by the Consumer Price Index.”

Despite the increase in stamp prices, the Postal Service doesn’t seem to be in a good shape either in this economy. Actually, the USPS is considering cut mail delivery from 6 days a week to 5 due to the decline in mail volume. With so many options available, I wonder how many people still use snail mails to communicate nowadays.

Special Offer: Earn hundreds of dollars of bonuses from banks and brokers.

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Stamps for First Class Mail to Increase to 44 Cents in May – Chart of the Day

U.S. January Unemployment Rate 7.6% – Chart of the Day

Sun — Fri, 06 Feb 2009 14:18:55 +0000

The Labor Department reported on Friday that U.S. monthly unemployment rate hit 7.6% in January, the highest level since September 1992. The unemployment rate in December 2008 was 7.2%. In January, employers cut a total 598,000 jobs, the most monthly job losses in more than 34 years. Both the number of job losses and unemployment rate are higher than economists have expected. The unemployment data highlights the deterioration of the labor market.

According to the Labor Department report, the number of unemployed person in the country has increased to 11.6 million. Since the recession started in December 2007, 3.6 million have lost their jobs. About half of the job losses occurred in the past three months.

In this enovirnment, you are lucky to have a job.

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U.S. January Unemployment Rate 7.6% – Chart of the Day

U.S. Personal Savings Rate Reached 7-Year High – Chart of the Day

Sun — Wed, 04 Feb 2009 04:24:47 +0000

The Commerce Department yesterday released U.S. Personal Income and Outlays for December 2008. Among the published data, the one that caught my attention was personal savings rate. According to the report, personal savings rose to $378.6 billion in December from $299.1 billion in November. In terms of percentage, personal savings rate in December is 3.6%. For the last quarter of 2008, personal savings rate is 2.9%, the highest level since the third quarter of 2001.

While the increase in personal savings is encouraging (we have heard a lot of warnings that the nation’s savings rate is just too low), what will it do to the economy that’s already in deep recession? There are arguments that with people being frugal, the ression could be prolonged. On one hand, the econonmy, which relies on consumer spending, can’t recover if people start to save every penny they earn; on the other hand, with millions of workers lost their jobs and home foreclosure rate on the rise, it just doesn’t make sense to expect people spend as they used to.

So is the increase in personal savings a good news or bad news?

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U.S. Personal Savings Rate Reached 7-Year High – Chart of the Day

U.S. November Home Prices Fell 18.2% Year-over-Year: Chart of the Day

Sun — Tue, 27 Jan 2009 17:46:34 +0000

No relief insight for home owners and it’s going to be particularly hard for anyone who wants to sell the house in this market.

According to the S&P/Case-Shiller Index published today, U.S. existing single family home prices plunged a record 18.2% year-over-year in November after a similar drop in the October survey.

The Composite-10 Index which covers 10 metropolitan areas fell 19.1% since November 2007. Among the hardest hit areas Phoenix, AZ led the way with 32.9% year-over-year decline over home values, followed by Las Vegas, NV 31.6% and San Francisco, CA 30.8%. Areas where home prices depreciated the least are Dallas, TX, 3.3% over the past 12-month period, and Denver, CO 4.3% and Cleveland, OH 5.2%.

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U.S. November Home Prices Fell 18.2% Year-over-Year: Chart of the Day

30-Year Fixed-Rate Mortgage Rate Fell to Record Low – Chart of the Day

Sun — Thu, 15 Jan 2009 17:55:10 +0000

From the rates point of view only, now may be the time to shop for a new mortgage or refinance your existing mortgage.

Freddie Mac today released its Weekly Primary Mortgage Market Survey, which showed that average rates of 30-year fixed-rate mortgage has dropped to a new low at 4.96% from 5.01% a week ago, the lowest point since Freddie Mac started rate tracking in 1971 . Mortgage rates have been falling since November after the Federal Reserve announced it plans to buy mortgage backed securities.

However, despite the record low of mortgage rates, the housing market still doesn’t show any sign of bottoming, let alone improving, as house prices kept falling. On the other hand, lower mortgage rates did attract many homeowners to refinance their loans. According to The Mortgage Bankers Association, mortgage loan applications increased 15.8% for the week ending January 9, 2008 from a week early, while refinance jumped 25.6%.

While many took advantage of the 5% rate to save money on monthly mortgage payments, not everyone benefits from the low rates, especially those whose home value has dropped below what they owe on the mortgage. And let’s not forget that 3.6 million people lost their jobs since the recession began in December 2007.

A record low mortgage rate, but do you care?

*Data source Freddic Mac

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30-Year Fixed-Rate Mortgage Rate Fell to Record Low – Chart of the Day

Home Prices Kept Falling – Chart of the Day

Sun — Wed, 31 Dec 2008 04:46:28 +0000

Has the housing market bottomed?

It doesn’t look like so, at least not from what we can see from the S&P/Case-Shiller Index. Standard & Poors today leased its S&P/Case-Shiller Home Price Index for October 2008 which shows a 18% plunge of U.S. residential home prices in the past 12 months.

The index has fallen every month since January 2007. Of the 20 metropolitan regions across the index tracks, Phoenix, AZ showed the most decline in home value year-over-year at 32.66%, followed by Las Vegas, NV 31.70% and San Francisco, CA 31%. The smallest drop occurred in Dallas, TX, where home prices were down only 3.04% over the past 12-month period, followed by Charlotte, NC 4.42%and Boston, MA 5.99%.

If you are planing to buy a house, is now a good time to buy? Or you want to wait a little longer.

*Data source: Standard & Poors

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Home Prices Kept Falling – Chart of the Day

Weekly New Jobless Claims Reached 26-Year High – Char of The Day

Sun — Wed, 24 Dec 2008 16:12:14 +0000

The U.S. job market remains gloomy.

Early this month, the government statistics showed that monthly unemployment rate surged to 15-year high last month. Today, the Labor Department says Americans who file for new jobless insurance claims rose 30,000 for the week ending December 20, 2008, to reach 586,000, the highest level since November 1982. The more reliable 4-week moving average also saw a big increase of 13,750 to 558,000.

The new jobless claim number added to the fear that the recession, which is one year old already, is worsening. Yesterday, the Commerce Department reported that the U.S. economy shrank by 0.5% in the third quarter while new house sales fell to 17-year low in November (Bloomberg), showing no sign the housing market is bottoming, let alone improving.

*Data source: Department of Labor

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Weekly New Jobless Claims Reached 26-Year High – Char of The Day

November 2008 Monthly Unemployment Rate at 15-Year High – Chart of The Day

Sun — Fri, 05 Dec 2008 15:11:57 +0000

U.S. Labor Department released monthly unemployment data for November 2008 and it’s not a pretty picture: the monthly unemployment rate reached a 15-year high of 6.7% in November. The last time when monthly unemployment rate was this high was September 1993.

According to the report, U.S. employers eliminated 533,000 non-farm positions last month, followed by 403,000 in September and 320,000 in October. In just three months, as we have seen the deterioration of the economy, more than 1.2 million jobs have been lost, that’s more than 2/3 of the total job losses since the current recession started a year ago. A total of 1.9 million people have lost their jobs since December 2007. As of November, the number of unemployed person in the country grew to 10.3 million.

Among all industrial groups, the manufacturing sector continued to lead with the most job losses at 85,000. The financial sector, an industrial group that’s in the center of the crisis, cut 32,000 poisitions last month, bringing the total job losses in that area to 142,000 since last December. Late last month, Citigroup announced that it will reduce more than 50,000 positions in the coming months. If Detroit’s big-three don’t get the $35 billion bailout loan they are desperately seeking for, we can expect unemployment rate to go even higher

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November 2008 Monthly Unemployment Rate at 15-Year High – Chart of The Day

Quarterly GDP Down 0.5% in Third Quarter – Chart of the Day

Sun — Thu, 27 Nov 2008 04:43:10 +0000

The Commerce Department released revised quarterly GDP data yesterday, showing that the nation’s economy contracted in the third quarter. The 0.5% annual decline in domestic gross product from July to September is worse than the initially estimated 0.3% and it’s the severest since the third quarter of 2001 when the economy shrank 1.4%.

Since the crisis began last summer, we have seen two negative GDP figures (the first one was the fourth quarter of 2007), but no consecutive declines, which means the economy is not statistically in a recession yet. The general definition of recession is “two consecutive quarters of negative growth (or contraction) of gross domestic product (GDP).” Looking at the above chart, there were no two consecutive quarterly negative GDP growth from 2000 to 2002 when the dot com bubble burst either, but everybody knew the economy was in a recession, just like how everybody is seeing the economy now.

Given what happened in October and so far in November, we may have an official recession when the data for the fourth quarter comes out.

*Data source: Bureau of Economic Analysis

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Quarterly GDP Down 0.5% in Third Quarter – Chart of the Day

Unemployment Rate Reaches Five-Year High

Sun — Sun, 07 Sep 2008 03:22:49 +0000

Yesterday, the government announced that in employers shed more than 85,000 jobs in August. That’s the eighth monthly job loss in a row. Though historically, the unemployment rate now is nowhere near the level in the early 90s (the chart below is the historical monthly unemployment rate since 1990), last month’s 6.1% unemployment rate is still the highest level since September 2003 when the economy was at the bottom of the last recession. So far this year, more than 600,000 jobs have been lost due to everything we have already known: rising energy cost, falling home price, turmoil in the finance market, etc.

The first economic stimulus plan has come and gone. When the plan was first proposed, it was supposed to give the economy a shot in the arm. So far it looks like the checks we received did a little to boost the economy other than giving the retail sales a few tenths of a percentage point gain in June and July.

Do we need a second stimulus like the Democrates are proposing?

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Unemployment Rate Reaches Five-Year High