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Posts Tagged ‘construction’

After reaching a three-decade low of 55.3 in November, the Reuters/University of Michigan preliminary index of consumer sentiment rose to 58.5 from 57.3 in March, based on an average of sixty one estimates, and it is hoped than an improvement in confidence may help sustain a recovery in consumer spending, which accounts for 70% of the U.S. economy.

The Commerce Department said yesterday (April 16th) that builders broke ground at an annual rate of 358,000 on single-family homes in March, which although unchanged from the previous month, suggests that the housing market may have reached bottom, and The National Association of Home Builders/Wells Fargo confidence index also rose this month to its highest level since October.

James O’Sullivan, who is a senior economist at UBS Securities LLC in Stamford, Connecticut said, “The economy has started to show signs of improvement. Given all the policy action and mortgage rates coming down, we are starting to see less pessimism”.

Federal Reserve Chairman Ben S. Bernanke said just one day before the report was made public that, “the signs of stability make for a potential first step toward a recovery from the downturn that started in December 2007″.

Other encouraging news is that reports by the Philadelphia Fed and New York Fed earlier this week showed manufacturing shrinking at a slower pace this month, and according to the Labor Department, the number of Americans applying for first-time jobless benefits unexpectedly dropped last week to the lowest level in almost three months.

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A slew of major job cuts was announced on Monday January 27 and the announced cuts were by big companies in different States and they came in various industries and job classes.

The total number of job losses announced came to around 50,000 with the highest number occurring at Caterpillar (CAT) which announced that it would cut approximately 20,000 jobs over the next few months which amounts to one fifth of its total workforce.

The cuts can most likely be attributed to the lack of building starts and a company spokesman said it was cutting jobs because, “financial markets remain under stress and expectations for 2009 have deteriorated” and added that the cuts are in line with at least a 25% decrease in sales for the year”.

The company did not clarify however where the job cuts would come from or when they would be implemented.

Pfizer (PFE) announced that its merger with Wyeth (WYE) would engender around 18,000 job losses which equates to approximately 15% of the company’s combined work force.

Pfizer had already announced job cuts in recent weeks that included both scientists and sales staff and its CEO Jeff Kindler said “the cuts would be difficult and painful but very necessary”.

Sprint Nextel (S), which is a wireless and broadband company announced that it would cut about 8,000 jobs over the next three months which would equate to approximately 13% of Sprint’s work total workforce. Sprint’s CEO Dan Hesse said, “Labor reductions are always the most difficult action to take, but many companies are finding it necessary in this environment”. It is hoped that the job cuts will save the company about $1.2 billion a year in labor costs and it was noted that additional jobs cuts might occur if the economy didn’t improve.

Home Depot (HD), which is the nation’s largest home-improvement retailer, announced that it would be cutting about 7,000 jobs in the coming months due to the downturn in the housing market and said that the cuts will primarily be in office operations and that its upper management will likely be reduced by around 10%.

And to round off a real black Monday, General Motors (GM) said it would be laying off a 2,000 additional workers in the next few months and that more downtime can be expected at many of its plants.

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