Daily Market Commentary for February 2, 2012
The insider trading bill for lawmakers is something everyone should be
calling your state representatives about - its common sense that insider
trading should be banned for everyone, regardless of your job, title or
government position. (read more at Millennium-Traders.Com)
http://www.millennium-traders.com/news/newscommentary.aspx
The Labor Department reported that productivity of U.S. businesses rose
at a slower rate in Q4, as labor costs rose. According to a preliminary
reading by the Labor Department, productivity in the final three months
of 2011 increased 0.7%, compared with a 1.9% gain in the prior quarter,
with Q3 productivity revised down from a previously reported 2.3% growth
rate. U.S. productivity rose at a 0.7% annual rate for all of 2011
which was much smaller than the 4.1% increase in 2010 and a 2.3% gain in
2009. Higher U.S. productivity is regarded as the key to a rising
standard of living over time because it tends to lead to higher pay for
workers and larger profits for companies. For example, companies might
reduce staff but keep production at the same level or install more
labor-saving devices to avoid the need to hire - which explains why
hiring in the U.S. has been mediocre since the last recession ended. A
drop in productivity stemming from higher output and more hours worked,
such that occurred in Q4, is often a signal that companies need to add
more to their staff. Real output, the amount of goods and services
produced, grew at an annual rate of 3.6% in the Q4. Hours worked rose
2.9% and hourly wages climbed 1.9% after a small decrease in the prior
quarter resulting in increase in unit-labor costs by 1.2%. Unit-labor
costs reflect how much it costs a business to produce one unit of
output, such as a ton of steel or a crate of toys. During 2011,
unit-labor costs rose a minute 1.3% overall. Despite the increase in
hourly wages and hours worked, employees didn’t benefit as much as
expected. Hourly wages in Q4 rose just 1.0%, adjusted for inflation, and
actually declined for the full year. The standard of living was reduced
for millions of Americans in 2011 due to higher cost of basic
necessities, mainly food and fuel. Inflation has seen to be leveling off
in recent months.
The Labor Department reported fewer Americans applied for unemployment
benefits last week, indicating the U.S. labor market continues to
gradually improve. For week ended January 28, U.S. jobless claims
dropped by 12,000 to a seasonally adjusted 367,000 - near a four-year
low with the four-week average of claims fell by a smaller 2,000, to
375,750. Although the monthly average has shown little change over the
past six weeks, it remains near a four-year low and stands at level that
usually suggests a healing labor market. The recent decline likely
indicates a slowdown in layoffs since claims reflect how many people
lose their jobs. Even if companies are laying off fewer workers, it
still does not they are eager to hire. The current pace of job creation
of nearly 150,000 jobs a month remains too slow to put millions of
unemployed Americans back to work. On the eve of U.S. data on nonfarm
payrolls and joblessness for January, the past week’s jobless claims
data are likely to draw more than the usual scrutiny. The Labor
Department also reported continuing jobless claims - with a one-week lag
- decreased by 130,000 to a seasonally adjusted 3.44 million in the
week ended January 21. In the seven years prior to the 2007-2009
recession, U.S. jobless rate ranged between 3.8% and 6.2%. For week
ended January 14, nearly 7.67 million people received some kind of state
or federal benefit, virtually unchanged from the prior week.
Democratic leadership are hoping for votes on amendments Thursday to
legislation seeking to curtail insider trading of securities by
lawmakers, though many of the measures under consideration are
controversial and could bog down final passage of the bill. The new
legislation would prohibit lawmakers, their families and staff from
buying and selling securities based on their knowledge of non-public
information. Additionally, the bill will require lawmakers and their
staff to report stocks and commodities transactions within 30 days of
buying and selling the securities and, will require information about
their trading to be published in a searchable, online database. Senate
Majority Leader Harry Reid said Thursday morning that he and others were
busy working on the insider trading legislation until late Wednesday
and he has hopes to have votes on amendments to the bill Thursday.
“We’ve worked very hard until late in the evening last night to try to
come up with an agreement to complete action on this bill,” Reid said.
“I will notify senators when those votes are scheduled. We hope that can
be done.” The bill appeared to be on the fast-track after passing a key
procedural hurdle late Monday with a vote of 93 to 2, easily surpassing
the 60 votes it needed to move forward. A number of controversial
amendments were introduced over the past few days, many of which could
complicate final passage of the bill - nothing that surprises Main
Street America. Lawmakers were negotiating in private over which
amendments will be permitted to come up for a vote.
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