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pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
Unemployment rose again last month, climbing higher in 43 states, which is particularly surprising when compared to the 36 states that reported improved numbers in November. Once again, it might have been worse, but for the curious ways in which the unemployment rate is calculated:

In another nationwide trend, long-suffering states like California and Michigan saw their jobless rates stabilize even as they continued to bleed jobs. That’s because thousands of frustrated workers gave up hunting for work and dropped out of the labor force, which means they aren’t included in the unemployment rate.

Contrary to common sense, the unemployment rate isn’t calculated based on the total number of people who don’t have jobs, so people becoming so frustrated they quit looking actually improves the number (even though they’re certainly telling their friends they’re unemployed because, you know, they don’t have jobs).

Overall, 85,000 jobs were lost in December (compared to a 4,000 job increase in November) – but 600,000 people left the labor force in the same period. So the numbers are even worse than the record levels they’re currently reaching. For example, New York’s unemployment rate is nine percent, a 26-year high, and New Jersey’s 10.1% is a 33-year high.

The trend isn’t looking much better lately, either. First-time jobless claims rose 36,000 to 482,000 last week, once again surprising economists, who had a consensus estimate of a slight decrease (although this week’s numbers might be slightly off due to estimating necessary as a result of the Martin Luther King holiday). That marks the first time the four-week rolling average has increased in 19 weeks.

But that’s the big picture. After the jump, the goings on in the legal sector.

double red triangle arrows Continue reading “This Week in Layoffs: 01.23.10″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
If you thought unemployment and underemployment (which does include people who become discouraged and voluntary stop looking for work) were arbitrary and capricious, you’ll really enjoy the latest explanation from the White House.

The White House has abandoned its controversial method of counting jobs under President Barack Obama’s economic stimulus, making it impossible to track the number of jobs saved or created with the $787 billion in recovery money.

Despite mounting a vigorous defense of its earlier count of more than 640,000 jobs credited to the stimulus, even after numerous errors were identified, the Obama administration now is making it easier to give the stimulus credit for hiring. It’s no longer about counting a job as saved or created; now it’s a matter of counting jobs funded by the stimulus.

That means that any stimulus money used to cover payroll will be included in the jobs credited to the program, including pay raises for existing employees and pay for people who never were in jeopardy of losing their positions.

That lede is a little skewed, though – it was always impossible to track the number of jobs saved or created. The administration just finally realized that, and now the Republicans are going to have to find a new angle of attack after coasting for a year on easy cheap shots against the White House’s unsupportable numbers.

However many jobs the plan saved, created, or funded, unemployment ticked up again slightly last week, but the general trend is still flat or slightly improving.

Similarly, law-firm layoffs have slowed down, although there are still no signs of significant hiring. Developments in that little slice of heaven after the jump.

double red triangle arrows Continue reading “This Week in Layoffs: 01.17.10″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

The year isn’t off to a good start, but it’s the same bad news it’s been for a while. Focus is increasingly turning to the underemployment rate, rather than the unemployment rate.

It’s the same old denominator problem. Unemployment looks not bad (relatively speaking) at first glance – it was flat at 10.2%. But 661,000 people left the US labor force last month and a similar number of jobs were lost. Had the denominator remained constant, unemployment would have been 10.4%. Overall, 1.7 million Americans left the workforce in the second half of 2009, which was a 1.1% decline, and the workforce as a percentage of total population hit the lowest point since 1985.

That could make for an interesting contrast – the unemployment rate may increase as disaffected people become optimistic about their prospects and re-enter the workforce, even as jobs aren’t actually opening up at the same rate. So higher unemployment may well be a positive indicator, to the extent it results from an increase in the denominator, rather than another decrease in the numerator. In other news, ignorance is strength and war is peace.

But last year is last year, and we’ve already recounted its failings vis a vis law-firm layoffs.

What’s happening now? After the jump.

double red triangle arrows Continue reading “This Week in Layoffs: 01.09.10″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
You take the good, you take the bad, you take them both and there you have the facts of modern American unemployment. In this case, the good is that unemployment decreased in 36 states in November. The bad is that first-time claims were higher than expected last week.

We try to be optimistic (see, e.g., the Law Shucks Bonus Tracker), but it’s tough. Take that "good" news, for example. Not only does that mean that unemployment was up in 14 states (we’ll ignore DC and PR for now), but it’s hardly "good" news that the unemployment rate was "only" 10.6%, as was the case in Kentucy, which was down from 11.3%.

Commenters love to debate what got us here, but the general public isn’t happy about what’s being done to fix it. A majority of Americans disapprove of President Obama’s handling of the economy (and healthcare, but that’s beyond the scope of this column). Those two issues have caused his overall approval rating to plummet as well, down to 50%, from 69% less than a year ago. He’s keeping a positive mindset about the whole mess, though, saying that he’s more concerned about how he’s positioning the country for the future and giving himself a "B+."

Obviously, he’s down with his alma mater’s stance on grading curves (read: grade inflation). At least he didn’t throw big-firm lawyers (directly) under the bus like he did our bank clients, blaming the recession on "the irresponsibility of large financial institutions on Wall Street that gambled on risky loans and complex financial products, seeking short-term profits and big bonuses with little regard for long-term consequences."

This column covers the gamut of law-firm economic developments, and we were fully expecting to not be writing about any layoffs per se this week.

Whoops.

double red triangle arrows Continue reading “This Week in Layoffs: 12.20.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

This recession is turning out to have all of the unemployment and none of the rebound of the recession in the early 1980s. Unemployment is expected to average 10% through the first half of the year, which will stifle any recovery rooted in consumer spending or economic growth.

Still, technical signals indicate the recession is ending, as the US economy grew by 2.8% last quarter and is gaining at a 3% clip this quarter. That rate is also expected to continue through the first half. Fortunately for transactional lawyers, a cause (or effect, depending on whom you ask) for that moderate growth is that lending has started to loosen, which is allowing more deals to get funded. President Obama is also meeting with executives of 12 major banks to see how he can get them to increase lending to small businesses.

Unfortunately, the catalyst for recovery from that early 80s recession isn’t available anymore. Paul Volcker, Chairman of the Federal Reserve Board under Presidents Carter and Reagan, had raised the federal funds rate from 11.2% in 1979 to 20% in June 1981. As he started chopping the rate back down, recovery followed (albeit two years later). Through the first half of 1983, the economy grew by 7.2% and unemployment dropped over all of 1983 from 10.8% to 8.3%.

Bernanke doesn’t have that tool in his toolbox: the current target rate is 0.00-0.25%

Law firms continue to meander along behind the broader economy. After the jump, we highlight their economic efforts over the past week.

double red triangle arrows Continue reading “This Week in Layoffs: 12.12.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

Huzzah! Unemployment is down this week. OK, we’re not that excited. It’s not easy to get excited about the unemployment rate being "only" 10%. Week in and week out, economists are surprised by the rate – in good weeks they only under- or over- estimate, but all too often, they’ve been getting the entire direction wrong. Supposedly, this week’s good news even caught the administration off guard, causing President Obama’s speechwriters to scramble to breathe some sunshine into a recent speech.

One question his team definitely didn’t prepare him for was whether he’d consider legalizing prostitution, marijuana, and non-violent crimes to kickstart the economy. To the chagrin of some (many?), that’s not on the table. No word on whether he has considered gay marriage can save the economy.

After the jump, we recap what little information we’ve been able to extract from the firms this week.

double red triangle arrows Continue reading “This Week in Layoffs: 12.05.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
Even though we’re going to see unemployment continue at the highest level since 1983, there are some promising trends. November payrolls are expected to fall by 120,000, which would be the fewest since January 2008 (or, as we at Law Shucks call it, "when Cadwalader started the law-firm layoff trend in earnest" — that’s when we started keeping track). Unfortunately, this continues to be a jobless recovery, and unemployment is expected to exceed 10% through the first half of next year.
And that’s not even considering the so-called "underemployment" rate, which is between 16-20%, depending on whom you ask (and how you count).
We might get a little direction on the U.S. macro plan on Thursday, when President Obama holds his "Jobs Summit", at which he will have lunch with a bunch of rich, employed white guys, and figure out how to magically make jobs appear after $787 billion failed to do so. And it’s even trickier now, now that his Democrat base wants him to create the jobs without spending any more money (they want the money spent on healthcare). It’s also interesting that Obama has said that the government has done what it can, so now it’s time to hear from the private sector (which makes sense with the Summit), while people like Jack Reed (D-RI) are basically saying that the government should extend its involvement in the private sector by subsidizing job growth.
But at least he’s keeping a good outlook on the whole mess, quipping that he "saved or created four turkeys" at the annual White House turkey pardoning.
So while the U.S. stumbles along with little or conflicting direction, law firms just stumble along. After the jump, firms’ most-recent efforts to return to profitability (and a big announcement from Law Shucks).

double red triangle arrows Continue reading “Thanksgiving Week in Layoffs: 11.30.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

This week, economists missed on the good side — initial jobless claims fell by more than expected. The 502,000 applicants are the fewest since January 3, and the four-month rolling average is at the lowest level since November 2008.

It’s tough to grasp half a million people filing for first-time benefits as good news, but these are troubled times, so we have to cheer where we can. Don’t get too excited, though. Even news that looks good at first glance probably isn’t. The 139,000 people who came off the continuing-claims roster more likely did so as a result of benefits running out or giving up the search than actually finding work.

But don’t be surprised if that number starts creeping back up. A bill was passed last week that will extend benefits by 14 weeks in all states, and six additional weeks in states where the unemployment rate is greater than 8.5%.

All in all, it was a relatively good week in BigLaw, with no layoffs reported. Nonetheless, firms continue to flail about trying to fix their economic models, and we document the efforts after the jump.

double red triangle arrows Continue reading “This Week in Layoffs: 11.14.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.

It was pretty hard to miss this week’s big news: unemployment crashed through the 10% barrier, hitting 10.2% in October – the highest level since 1983 (and, of course, worse than predicted). Underemployment also hit record levels, with the number of self-reported disenfranchised and under-utilized people reaching 17.5%.

Republicans jumped on the numbers as a sign that Obama’s package has failed, and the White House countered that it has saved almost 700,000 jobs. But that claim doesn’t even come close to addressing the original estimates and is completely unmeasurable. Still, the administration is reconsidering ideas it had previously rejected, like a highway bill and a business tax credit for new hires, even as they ask for two versions of a budget: one with flat spending and another with a 5% cut.

Law firms got their place in the MSM sun this week, as Bloomberg used a former law-firm employee as an example of increased migration to areas perceived as having jobs:

Some people are pulling up stakes and moving to where they think the job prospects may be brighter. Beth Rubin, 41, lost her position as a receptionist at the law firm Goldstein Bershad & Fried, PC in Southfield, Michigan, in October. The resident of Ferndale, a Detroit suburb, is now selling her furniture and moving to Georgia. “I’m looking to get a job in Georgia, and I don’t know about the job market there, but I can tell you Michigan is horrible,” Rubin said in a telephone interview.

Of course, anything has to be better than Detroit.

More on the highs and lows in the legal sector, after the jump.

double red triangle arrows Continue reading “This Week in Layoffs: 11.07.09″

pink slip layoff notice Above the Law blog.jpgEd. note: Above the Law has teamed up with Law Shucks, which has done excellent work translating all of the layoff news into user-friendly charts and graphs: the Layoff Tracker.
Last week we wrote that jobless claims were higher than expected and that predicting anything with any degree of confidence seemed pointless. This week, the number of people receiving unemployment benefits was lower than expected, the lowest levels in seven months, and that was before announcement that benefits will be extended again. Still, the best that can be said is that the cuts are slowing:

Companies are cutting fewer jobs as they see more evidence of a recovery, helped by government stimulus efforts and less weakness in housing and manufacturing. While a separate report today showed the economy expanded for the first time in more than a year, a rebound in hiring may take longer to materialize

So while things bounced around unpredictably in the broader market, we had two notable announcements in law-firm innovations this week. We’ll cut right to them after the jump.

double red triangle arrows Continue reading “This Week in Layoffs: 11.01.09″

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