Unemployment rate hits 9.4 percent in December

 It took just 18 months for the nation’s unemployment rate to rise from 5 percent to over 10 percent during the economic downturn. It is likely to take many years before the jobless rate drops back anywhere near 5 percent, economists say.
The unemployment rate fell in December to 9.4 percent from 9.8 percent in November, the Labor Department said Friday. It was the lowest in 19 months as the economy generated a net total of 103,000 jobs and marked the biggest one-month decline in the jobless rate since April 1998.
Story: U.S. businesses stepped up hiring in December The economy is moving in the right direction, analysts say, having added 1.1 million jobs, or an average of 94,000 jobs a month in 2010. But it is not enough to have a significant impact on the unemployment rate, which remains uncomfortably close to the 27-year high of 10.1 percent hit in October 2009.
“It’s going to take a whale of a long time to get back to any semblance of normal, even if the numbers are going up,” said Mike Montgomery, U.S. economist with IHS Global Insight.
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Like most economists, Montgomery does not expect the unemployment rate to drop below 9 percent this year, even as the economy steadily adds jobs at a modest rate amounting to a net 100,000 to 200,000 positions monthly. By the end of 2012, he expects the jobless rate to remain at a historically high level of 8.5 percent.
Part of the problem is that the growing U.S. population means the economy needs 100,000 new jobs each month just to absorb new workers and prevent the unemployment rate from rising, said Paul Ashworth, chief U.S. economist with Capital Economics.
As the economy improves more people will come off the sidelines to look for work too, either because they have been in school getting retrained or simply because they see job prospects improving. The government measures the unemployment rate by a survey method in which people are considered unemployed only if they are actively seeking work.
In December, the Bureau of Labor Statistics said the number of people in the labor force actually fell by around 260,000, which is one reason the unemployment rate declined so sharply.
A broader glimpse at the unemployment rate Goldman Sachs projects that employers will add 2.2 million jobs this year, or about 180,000 a month, double last year's amount. Moody's Analytics puts the figure at about 250,000 per month.
Economist Joel Naroff noted in a research note Friday morning that we have come a long way from last year, when the economy was still shedding jobs. But he said Friday's unemployment report shows improvements in the jobs picture will be slow.
"The details of the report support the view that businesses continue to hire but still see no reason to add lots of workers," Naroff wrote.
Federal Reserve Chairman Ben Bernanke, who spoke about the economic outlook Friday on Capitol Hill, said it will take years for the unemployment rate to return to a healthy level of about 5.5 percent.
"The economic recovery that began a year and a half ago is continuing, although, to date, at a pace that has been insufficient to reduce the rate of unemployment significantly," Bernanke said in testimony released Friday morning.
The Fed said the testimony was written before the unemployment rate was announced.
Readers, are you back at work after a long job hunt?
Where the jobs are, and aren’t For millions of jobless Americans, the big question is where the jobs are.
Experts expect continued job growth in health care, which has been a bright spot even during the sluggish recovery.
Montgomery also is expecting to continue to see strength in temporary jobs. But while such jobs have traditionally been seen as an indicator that employers were gearing up to hire more full-time workers, it’s not clear that will be as true this time around.
Instead, he said, some of those jobs may be designed to employ temporary workers for longer, so the employer doesn’t have to take on the burden of benefits and other costs of full-time employees.
Ashworth is expecting to continue to see jobs growth in manufacturing, as the weak dollar and economic growth in Asia and parts of Europe spur demand for experts.
It’s not likely to be enough to offset the approximately two million manufacturing jobs that have been lost since the recession began.
The job market will remain tough in industries including construction, Ashworth said. That sector has been decimated by the housing bust and a slowdown in commercial building.
Employment gains in December were led by the private services sector, which saw payrolls rising 115,000 after gaining 84,000 in November. Retail jobs increased 12,000 after a surprise 19,400 slump in November when retailers reported their best sales in years.
Temporary hiring increased 15,900 after 31,100 in November.
The goods-producing sector shed 2,000 jobs in December after losing 5,000 in November, but manufacturing payrolls rose 10,000. Construction employment fell 16,000 after slipping 2,000 in November.
Montgomery also is expecting the government to continue to shed jobs in the coming year, as cash-strapped states and budget-minded federal officials look for more ways to pinch pennies.
That's one of the reasons President Obama is courting business so heavily lately. It's estimated that non-financial companies have almost $2 trillion in their coffers and the president would like companies to use some of that to hire workers in the U.S.
With the unemployment rate still extremely high by historical standards, experts say jobseekers shouldn’t limit themselves to any one field. After all, even in a sector that isn’t adding many jobs, there are bound to be people who leave and jobs that come open.
“Look everywhere,” Montgomery said. “It’s not like you can target an industry and say, ‘I want to work for the high-tech companies,’ as much as you could have five years ago.”
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John Jantsch, author of "The Referral Engine," offers tips on how you can get customers to give your business high marks to potential acquirers.

The process of selling a business is a long journey that typically starts with courting a number of potential buyers. Once you have a few parties interested, there will be management presentations and hopefully multiple offers to buy your company. After evaluating the offers, you’ll likely need to agree to one of them in principle and give your preferred buyer exclusivity to perform their due diligence before they hand over the check.

One of the final tasks of diligence often involves a prospective buyer talking to your customers. After you’ve spent years getting your business ready to be sold and months negotiating with buyers, it may all come down to a conversation between the acquirer and your customers. In fact, getting your customers to say nice things about your business may be the final hurdle you have to overcome before selling your business.

In his new book, The Referral Engine, John Jantsch outlines a formula for creating a referable company. I asked Jantsch to provide his best advice for becoming referable. Here’s our exchange:

Q. I think all business owners would like more referrals. I know your book offers a system, but what one thing would you recommend business owners do today that would immediately get them more referrals?

A. It’s not something tactical that you can do today; it’s a matter at looking at your entire customer experience and finding ways to be more referable. Plug the gaps in each client contact, add ways for customers to get to know more about you and your people, offer trial products that let people test the experience, make the experience of becoming a customer the same as when you were courting the customer, measure the value you are giving, and find ways to improve and increase your contacts.

Q. One of the elements of creating a sellable business is creating a business that’s not reliant on the owner. What’s the secret of generating referrals for a business (as opposed to for the founder personally)?

A. I tend to agree that it’s pretty tough to sell a business that’s a personal brand—go to work on getting yourself out of the marketing department, or at least out of being the rainmaker. Until you can delegate the generation of leads and referrals by creating a success system, you’ll have a tough time convincing someone else they could do the same. I know it’s not too sexy, but documented systems, even for selling, are the key.

Q. Assuming you have identified a possible company to buy your business, how can you get someone to say nice things about your company so that the acquirer will get interested without you having to declare that your business is for sale?

A. Well, I don’t think you simply convince people to say something nice about you as an event. This is something you start today. Ask every customer why they buy from you, what you do that others don’t, if they would refer you and why. This line of research needs to be part of the culture of continually understanding how to get better, how to create a better experience. Do this for any amount of time, and you’ll earn the right to get your customers involved in sharing their testimonials and success stories as an integral part of your marketing.

John Warrillow is a writer, speaker and angel investor in a number of start-up companies. He writes a blog about building a sellable company at http://www.BuiltToSell.com/blog



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The SurePayroll Small Business Scorecard results are in and they’re revealing more of the same. Jobs increased slightly from last month (0.2%) to bring us to a year-to-date increase of 4.1 percent and paychecks neither dipped nor rose from June, keeping us at a year-to-date loss of 0.4 percent. Independent contractors continue their slow and steady increase, now comprising 4.9 percent of the workforce (a 10 percent year-to-date increase).
This month’s numbers don’t reveal anything earth-shattering. But what’s really changed is the small business owner’s outlook on the state of the economy. Although we’ve had two months of similar hiring and paycheck numbers, the SurePayroll small business owner optimism number plummeted 11 points, revealing that only 55 percent of business owners are optimistic about the economy.  That dip is not too far off from consumer sentiment, according to the Thomson Reuters / University of Michigan consumer sentiment index. Their survey shows a 9 point dip in consumer sentiment from June, with 67 percent of consumers indicating they feel good about the economy.
I would say the numbers and rise in number of people who are pessimistic just confirm that we’re in a near holding pattern in our long, slow climb out of the depths of the recession. That is, if you think we’ve left the recession.  Unfortunately, most small businesses don’t think we have (3 in 4 business owners we recently surveyed don’t think the recession is over). When asked why, the majority cited a continued high unemployment rate as the main reason and government policies as another reason they don’t buy economists’ views that we left the recession several quarters ago. Perhaps the difference between the small business owners surveyed and these economists is simply a matter of semantics — what does “out of a recession” technically mean? But either way, business owners aren’t yet feeling better about the economy.
Likewise, consumer confidence is in a decline. More business owners may be feeling that the economy is not improving, but they aren’t drastically changing their hiring or pay habits at this point.  We learned that consumers, on the other hand, are acting on their feelings. They put a drastic halt on spending in July, which certainly won’t help improve small business sentiment.
The results of this month’s scorecard come out at the same time we get news that the GDP was much lower than expected in Q2. While there were some winners in the report that could be helping some of the business owners who reported that they are optimistic (non-trade business increased and equipment, software, structures and new construction spending rose), the media has concluded what business owners have —without more jobs,  we won’t see increased spending.  And without increased spending, we won’t see more jobs.
What does this mean for how you operate your business?  Clearly, everyone’s situation is different and requires an individual evaluation.  However, given the catch-22 we’re in (without increased demand/revenues, it is unlikely businesses will hire and take us out of the recession and without businesses hiring, it is unlikely consumers will have the income to spend to increase demand/revenues), the mantra of the day remains “caution.”  Take slow, deliberate actions that limit your risk for now.


Do you need to calculate debt reduction benefits?

You don't need an loan officer to help you calculate debt reduction benefits from a debt consolidation loan. If you have a little understanding of the terms you can use online consolidation calculator.

Debt Consolidation Calculators

Visit www.bankrate.com. Try to use the debt calculator on the site. There are many calculator similar to www.bankrate.com. Just enter your debt information and the calculator will tell you what will you pay, either as a personal loan or a home equity loan. You can compare costs for different lengths of time with the calculator.

Gather up the balance due and the interest rate for each credit card and installment loan (auto, student loans, etc.) that you are currently paying. You’ll also need to know how many months you have remaining on installment loans.

Enter credit card balances and interest rates. The calculator will figure out an approximate monthly payment, based on that info and the term you enter for the consolidation loan.

Input your info for installment loans filling in the amount you owe, monthly payment amount, and how many months are left on the loan. You don’t need to fill in the interest rate for installment loans, since the payment amount and loan term have already been determined.

Fill in the information for the loan you are considering, including interest rate, term and upfront costs.

For home equity loans, fill in points if you are paying any, the savings rate that you would have been paid if you kept your closing costs in a savings account. This is likely to only be about 2% or less at present. You can even input your income tax rate and the calculator will factor in tax savings.

Click the calculate button, and see what your payment would be.

Try various terms and interest rates to decide what interest rate or what term you would have to get to make the loan feasible for you. The benefit of doing this for yourself is that you can play with variables that a loan officer may not be interested in checking out for you. You can also use the tool to compare terms and rates offered by competing lenders.

A Startup Toolkit reader wrote asking “Should I buy the email list of a local business in my industry that’s going out of business?” My initial gut feeling was “No,” as they didn’t generate the list, and it’s not a good idea to “drop in unannounced.”

I like to bounce these things off people in the industry first, so I contacted Keith Moore, Chief Marketing Officer at iContact. Keith agreed, “If you want to utilize a list, have the owner handle sending a mailing on your behalf. You don’t have the trust and understanding of another firm’s customer.” So, my reader could work with the list owner to create an agreed-upon note that would introduce the competing service, and invite the current customers to join in.

Keith and I discussed the best practices involved. “Have the invitation go to a page on the company site where you can invite them to your list.” It has to be a normal, opt-in form. “Good mailing list management means always being clear and upfront with your customers. Don’t abuse the right to email them, and you’re more likely to keep them as happy customers.”

The other question the reader had was “How much do I pay for the list?”

My suggestion was “Pay for success.” In other words, if the list has 5,000 people on it, don’t pay for all of them. Let the going-out-of-business company send a mailing or two. Most email list software can let you segment your responses into a new list. Count the customers that are still with you in a month or two, and pay for those that are now your customers. Now you’ve gotten some valuable, opt-in customers, and you can give back some consideration to the person who provided the leads. Base the compensation around what your current cost of email acquisitions are. If you don’t know that number, think about a cost to get people to sign up at an event or trade show in your industry. Make sure the person with the list is comfortable with your calculation and your proposal. And good luck.

What’s your email acquisition strategy? Let us know.


Houses with low energy efficiency will lose value under government plans to intervene in the property market to help cut greenhouse gas emissions from homes by a third by 2020.

Estate agents will be given guidance telling them to take more notice of energy efficiency when deciding the value of homes. Ministers believe that homeowners are more likely to pay for efficiency measures such as solar panels and insulation if their investment clearly increases the property’s value.

The Department of Energy and Climate Change said in a strategy document that it had asked the Royal Institution of Chartered Surveyors for recommendations to ensure that a home’s energy performance was “better reflected” in its value. Council tax rebates of more than £100 a year will be offered to homeowners who improve insulation. Landlords will be barred from letting poorly insulated properties and will have to upgrade them to a minimum standard of energy efficiency.

Councils will be able to require energy companies to work with them to insulate social housing. Banks and shops will be encouraged to offer loans of £10,000 per home to householders who install solar panels, heat pumps and insulation. The repayments will be covered by savings in energy bills.

Conservatives propose energy-efficiency loans
UK homes to have smart energy meters by 2020
Legislation will allow the loans to be linked to the home rather than the owner, meaning that when the home is sold the new owner will inherit the debt. The National Association of Estate Agents said that such debts could make business more difficult.

John Healey, the Housing Minister, said that action was needed to reduce energy wastage in privately rented homes, which tended to be older and in poorer condition than owner-occupied homes. It is proposed to make the installation of loft and cavity wall insulation a condition of renting out a property.

by Ben Webster, Times Online

Harvard Business Review-Have you changed your behavior as a result of the "great recession?" According to a survey from the Department of Labor and a New York Times/CBS News poll, Americans are spending less time shopping and more time engaging in simple, low-cost activities with family and friends.

These include "organizational, civic and religious" pursuits; home-based hobbies like gardening and cooking; family sports such as hiking; and cultural endeavors like going to museums and movies. For many people this may be an obvious result of having less money to spend. But the dramatic climb in the savings rate (from less than 1 percent of income at the end of 2007 to more than 4 percent through most of 2009) suggests that even those with extra money are acting differently.

From an economic point of view, these shifts are generally good news. Americans seem to have learned (at least for now) that highly-leveraged spending sprees are not sustainable and have painful consequences. This may help dampen future speculative bubbles and provide a basis for reducing debt over time.

The real questions, however, are whether these behavioral shifts signal new patterns for American society and how these shifts might trigger changes in organizations. For example, many companies depend on large cadres of workaholic professionals and middle managers who put in long hours, are available around the clock, and are willing to sacrifice family and personal time for business activities.

Furthermore, managers in most U.S.-based organizations take either less vacation time, or less consecutive time off than their counterparts in Europe and elsewhere. But now that these managers have experienced the psychic satisfaction of less work and more personal time — even if it was forced by recessionary cutbacks and less available cash — will they be willing to return to the intense treadmill?

A Boston Consulting Group experiment, reported in Harvard Business Review in October 2009, suggests that it may be beneficial not only for managers and professionals to spend more time away from work, but also for the organization. In this study, BCG required its most intensely workaholic team members to take pre-scheduled, regular (one day per week) and complete (no phone calls or emails) time off during the course of a project. Not surprisingly, after some personal adjustments, the consultants enjoyed the time off. However, BCG also found that the project teams improved their communications and developed more innovative and efficient ways of working with each other.

Similarly, a series of pilots on flexible work arrangements sponsored by a non-profit group called the BOLD Initiative found that when teams were given the freedom to arrange work schedules around their personal needs and desires, it not only increased employee satisfaction but also improved team productivity.

Obviously there is no definitive answer as to whether the personal shifts sparked by the recession will be permanent. It may be in the best interest of companies however to encourage these changes in behavior with managers, professionals, and other high-pressured work groups. Who knows, for many of us, less work may not only be more satisfying, but also more productive.

Ron Ashkenas is a managing partner of Robert H. Schaffer & Associates a Stamford, Connecticut consulting firm and the author of Simply Effective: How to Cut Through Complexity in Your Organization and Get Things Done