Economy Watch: Unemployment, IMF Bailout of Portugal, Trump School Investigation
- May 23, 2011
The Bureau of Labor Statistics reported on Friday that regional and state unemployment rates were generally little changed or slightly lower in April compared with March–arguably good news in the sense that the numbers didn’t get any worse, but not indicative of vigorous growth in most parts of the country. Still, 46 states and the District of Columbia posted unemployment rate decreases from a year earlier, while three states reported increases and one state had no change.
Where is the hiring going on? The largest over-the-month increase in employment was in New York (up 45,700), followed by Texas (up 32,900), Pennsylvania (up 23,700), Massachusetts (up 19,500) and Florida (up 14,900). The largest month-over-month drop in employment was in Michigan, a state that hardly needs more economic pain. Some 10,200 jobs vanished there last month, according to the BLS. On the other hand, Michigan has seen the largest jobless rate decrease from April 2010 to this April, a decline of 2.9 percentage points.
Nevada retained its unwanted distinction of having the highest unemployment rate among the states:12.5 percent in April. California was next at 11.9 percent. Also as usual, North Dakota reported the lowest jobless rate in the nation: 3.3 percent. Nebraska sports an enviable rate as well, at 4.2 percent, and New Hampshire and South Dakota were tied for third-lowest unemployment rate in the nation at 4.9 percent each.
IMF Finalizes Bailout to Portugal, Calls It a Loan
Despite just losing its chief panjandrum to shame and embarrassment and possible prison time in the U.S. justice system, the International Monetary Fund was able to move forward on making a 26 billion euro ($37 billion) “loan” to Portugal to help that country stave off financial disaster. A good chunk of that total, 6.1 billion euros, is going to be disbursed right away to calm nervous markets in the EU.
“The financing package is designed to allow Portugal some breathing space from borrowing in the markets while it demonstrates implementation of the policy steps needed to get the economy back on track,” the IMF said in a statement, without using the a-word (austerity) but clearing meaning it. The cash will spare the country the necessity of going to the long- and medium-term borrowing markets for funding, which has been getting increasingly expensive for Portugal lately. About a third of the outlay will be from the IMF itself, while the other two-thirds will be from the EU, which signed off on the bailout last week.
By comparison, Greece got 110 billion euros about a year ago, while Ireland received an 85 billion-euro package in November 2010, so by that measure the Portuguese debt crisis equals (roughly) only a quarter of the Greek debt crisis (which isn’t over yet, despite the EU throwing money at it, with Fitch downgrading Greek sovereign debt on Friday to a risky B-plus). Will this be the last of the bailouts for sickly EU member states for the foreseeable future, with the better-off countries now tired of being hit up for euros?
State of New York Investigates the Donald’s School
Former not-really-presidential-candidate and current TV personality Donald Trump returned to the news again late last week, though perhaps not in a way even he would like, when it became clear that the New York state attorney general’s office was investigating the for-profit school that bears his name. At issue is whether the school and its recruiters misrepresented the quality of instruction, the ability of students to find jobs, the actual cost of attending and other such matters, to the point of fraud.
Naturally, instruction at the online Trump Entrepreneur Initiative (until last year, Trump University) is quite expensive–money that, alternately, could actually be invested in real estate, for example. A number of former students have complained about the quality of the instruction, up to and including a class-action lawsuit and various other forms of complaints. In published reports, the operators of the school assert that everything’s A-OK with the school, and you too can be a real estate millionaire!
Wall Street ended a mostly chipper week on Friday in a down mood, with the Dow Jones Industrial Average losing 93.28 points, or 0.74 percent. The S&P 500 and the Nasdaq declined 0.77 percent and 0.71 percent, respectively.