Tents under an overpass in a Fresno, California rail yard. Homelessness in Fresno has long been fed by the ups and downs in seasonal and subsistence jobs in agriculture, but the recession has cast a wider net and drawn hundreds of newly homeless., a photo by Pan-African News Wire File Photos on Flickr.
Weak U.S. labor market looms ahead of elections
By Lucia Mutikani
WASHINGTON (Reuters) - Fears of government austerity likely kept U.S. job gains modest and the unemployment rate elevated in September, an outcome that could weigh on President Barack Obama's re-election bid.
Employers are expected to have added 113,000 jobs to their payrolls last month, according to a Reuters survey of economists. That would be up from 96,000 in August, but it would still fall short of what is needed to cut the jobless rate.
Indeed, economists expect the unemployment rate, a key focus in the race for the White House, to tick up by a tenth of a percentage point to 8.2 percent as Americans come back into the labor force to resume the hunt for work.
The Labor Department's closely watched report, which will be released at 8:30 a.m. on Friday, will be the second last before the November 6 election that pits Obama against Republican Mitt Romney. If economists are on the mark, it would present a seventh straight month of lackluster job growth.
Whether or how much another modest rise in payrolls would hurt Obama, however, is not clear. "If they stay in a slightly positive territory they probably won't change the minds of too many voters," said Matt Jacobsmeier, an assistant political science professor at the University of New Orleans.
A Reuters/Ipsos poll released on Thursday after Wednesday's first presidential debate showed Romney gained ground and is now viewed positively by 51 percent of voters. Obama's favorability rating remained unchanged at 56 percent.
A survey by career network Beyond.com published on Thursday showed working Americans preferred Obama, while their unemployed counterparts favored Romney.
Economists blame the so-called fiscal cliff for the slowdown in hiring, which has left millions of Americans working either part-time or unemployed and too discouraged to look for jobs.
The Congressional Budget Office has warned that a failure by Congress to avoid the automatic tax hikes and government spending cuts that will suck about $600 billion out of the economy next year would knock the economy back into recession.
"Businesses are not hiring people, they want to wait and see how the election evolves and how the political landscape shapes up," said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo, California.
"Everyone has kind of battened down the hatches."
Job growth was strong at the start of the year but began to brake abruptly in March. Over the six months through August, it averaged about 96,670 per month - well below the 125,000 normally needed just to hold the jobless rate steady.
HUGE JOBS DEFICIT
The economy is still about 4.7 million jobs short of where it stood when the 2007-09 recession started. The jobless rate has been stuck above 8 percent for more than three years, the first time this has happened since the Great Depression.
Persistently poor labor market conditions led the Federal Reserve in September to announce a plan to buy $40 billion worth of mortgage-backed securities each month until it sees a sustained turnaround in employment.
The central bank, which also pledged to keep overnight lending rates near zero until at least mid-2015, hopes the purchases drive down long-term borrowing costs and spur the recovery.
The Fed's ultra easy stance has started to free up credit, giving a lift to consumers, economists said. That, in turn, likely helped lift retail hiring in September.
Temporary help jobs, which are often seen as a harbinger for permanent hiring, are also expected to show an improvement after falling in August for the first time since March.
Manufacturing payrolls are expected to have been flat in September, after posting their first drop in almost a year in August, but a sharp jump in automobile sales during the month suggests an upside risk.
Little improvement is seen in construction employment, which has remained subdued even as home builders have been breaking ground on new projects at a slightly faster clip this year.
Government payrolls are expected to have recorded their seventh straight month of declines in September.
With the overall pace of job growth anemic, average hourly earnings are expected to have risen just 0.2 percent last month after being flat in August.
(Reporting by Lucia Mutikani; editing by Tim Ahmann and Andrew Hay)
BOJ stands pat, keeps powder dry as recession risk looms
By Leika Kihara
TOKYO (Reuters) - The Bank of Japan resisted political pressure for action and kept monetary policy steady on Friday, but left the door open to more monetary easing later this month by striking a pessimistic note on the state of the world's third-largest economy.
Despite mounting signs that sagging exports to China and Europe may nudge Japan into recession, central bankers preferred to wait and assess the effect of stimulus unveiled just last month and save their limited options for now.
Underscoring heightening pressure from the government, newly appointed Economics Minister Seiji Maehara, a vocal advocate of aggressive monetary expansion, made a rare appearance at Friday's meeting to make a direct call for bolder action.
"I'd like to continue urging the BOJ to pursue powerful monetary easing to achieve its price target," Maehara told reporters after attending the rate review, becoming the first economics minister to do so in nearly a decade.
As widely expected, the central bank held off on expanding its asset buying and loan program, after having increased it just last month on fears that weak exports and output are diminishing prospects of a near-term recovery.
But it warned that the global economy was moving deeper into deceleration and hurting Japanese business sentiment, keeping alive expectations that it may ease at its next policy-setting meeting on October 30.
"Japan's economic activity is more or less leveling off," the central bank said in a statement announcing its policy decision. That was a grimmer tone than last month, when it said a pickup in growth was pausing.
Reflecting increasing signs that the economy may slip into a recession, the BOJ is expected to cut its long-term economic and price forecasts due out at the October 30 review, and admit that Japan remains years away from achieving its 1 percent inflation target, say sources familiar with the central bank's thinking.
"Downward pressure on the economy and prices is increasing, so keeping policy on hold at the BOJ's next meeting may not be an option," said Hiroshi Miyazaki, chief economist at Shinkin Asset Management in Tokyo.
So far this year, Japan's economy has outperformed most of its peers in the Group of Seven on spending for rebuilding from last year's earthquake. But with that effect fading, domestic demand may not make up for falling exports for much longer.
Output fell to a 15-month low in August on sagging sales to top export market China and business sentiment soured in the three months to September, fuelling concerns that the world's third-largest economy has stalled and may slip into recession.
BOJ officials have signaled their readiness to act again should the economy underperform despite September's easing, or if risks heighten enough to threaten Japan's recovery.
Anti-Japan protests in China have added to headaches for Japanese companies. Toyota Motor Corp's (7203.T: Quote, Profile, Research, Stock Buzz) China sales fell about 40 percent in September, underscoring how badly the territorial row is hitting Japanese brands.
Pressure from the government, which has little room to boost fiscal stimulus due to Japan's burgeoning public debt, will keep the central bank on edge.
Two government representatives, one from the finance ministry and another from the Cabinet Office, which Maehara heads, can attend the BOJ's policy meetings. They cannot vote but may express views and propose a request in vote on policy.
While stressing that he respects the BOJ's independence, Maehara said he will continue to attend policy meetings as much as possible to call for efforts to beat deflation.
The BOJ, however, is running out of tools to force-feed cash to markets already awash with excess funds.
It needs to pump 20 trillion yen ($255 billion) more into markets by the end of next year to achieve the 80-trillion-yen target set for its asset buying and loan program, under which it offers funds via market operations and buys government bonds, corporate debt and trust funds investing in stocks and property.
That is no easy task because commercial banks, struggling to find companies willing to borrow money amid a weakening economy, are in little need of cash and so are piling up the money into their deposits at the central bank.
Maehara has urged the BOJ to buy foreign bonds. But this will require a revision to current law that prohibits the BOJ from buying foreign assets to influence currency rates.
That means the most likely path would be for the central bank to continue boosting government bond purchases, sources have said, adding that there is still room to pledge bigger amounts of bond purchases for next year.
($1 = 78.4500 Japanese yen)
(Additional reporting by Stanley White, Kaori Kaneko and Tetsushi Kajimoto; Editing by Kim Coghill)