“Personal Finance: Shaking off lethargy in job market - Philadelphia Daily News” plus 1 more

Personal Finance: Shaking off lethargy in job market - Philadelphia Daily News

Posted: 12 Dec 2010 12:03 AM PST

Posted on Sun, Dec. 12, 2010

Despite growing signs that the economy is recovering, recent unemployment data have exposed a sore that is taking a while to heal.

Jobless benefits allow the unemployed to spend enough to add about 0.6 percent to the GDP, a government study says.

But analysts are increasingly anxious for real healing to begin.

"We need to declare a war on unemployment," said Brian Belski, chief investment strategist for Oppenheimer & Co. Inc., who compares the need for urgency to the Reagan administration's war on drugs. "We need to go to corporations and say, 'Why are you building in China and Vietnam? We will remove taxes for two or three years if you will build in Minnesota or some other state.' "

Belski is among analysts worried that U.S. jobs will go abroad and skeptical that businesses, on their own, will do the hiring the U.S. economy needs.

"What's their incentive?" Belski said. "They are sitting on the best balance sheets since the 1950s and plenty of free cash flow. Productivity is clipping away, and they are reporting record profits."

Economists had assumed that businesses would start hiring as they regained their strength. Instead, they are hoarding cash: Profits for Standard & Poor's 500 companies are expected to increase 47 percent for the year.

Waiting too long

They are behaving as expected, delivering profits to shareholders, Belski said.

But there are risks in waiting too long for companies to be motivated to hire.

"The longer unemployment lasts, the more structural (or entrenched) it becomes," said Nariman Behravesh, chief economist for IHS Global Insight Inc. "The longer people are out of jobs, they lose skills and marketability."

The unemployment rate ticked up to 9.8 percent in November, compared with 9.6 percent in the previous month, with 15 million Americans unemployed and 6.3 million unsuccessfully looking for work for at least six months.

"In good times, most find jobs in six weeks," said Betsey Stevenson, the U.S. Labor Department's chief economist. "There just aren't enough chairs," she said, using a musical-chairs analogy. "Those that can't find jobs aren't too slow or unskilled; they are just unlucky."

There are about 4.4 job seekers for every job available, Stevenson said.

Consumer support

The United States relies on consumers to support about 70 percent of the economy, so the latest unemployment report shook economists. They had assumed that 150,000 jobs would be created in November, rather than just the 39,000 that were tallied. Not only was unemployment up and job creation anemic, but wages remained flat and companies were not adding hours for employees.

The flat workweek "is another indication that companies were not that busy last month - certainly not straining themselves to meet demand," said Gluskin Sheff & Associates Inc. economist David Rosenberg. "This was arguably one of the worst employment reports of the year."

The November jobs report was so poor that Behravesh wondered whether it was "a fluke." He expected about 100,000 jobs to be created and thinks the numbers will show up in future unemployment reports. As employment slowly builds, he expects unemployment to drop to 9 percent by the end of 2011.

Deutsche Bank AG economist Joseph LaVorgna also wondered whether the 9.8 percent unemployment rate was correct. That's because federal income-tax receipts point to a stronger job picture.

"Tax receipts rose nearly 7 percent in November relative to the comparable period last year," he said. "If sustained, this would be twice the average annual growth rate that prevailed during the last growth cycle," 2001 to 2007.

In January, economists expect to see this more encouraging job picture reflected in December unemployment figures - salve or not.

Gail MarksJarvis is a personal-finance columnist for the Chicago Tribune. E-mail her at gmarksjarvis@tribune.com.

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Personal Finance: Money experts recommend holiday gifts - Sacramento Bee

Posted: 12 Dec 2010 12:03 AM PST

If you're tired of plodding through shopping malls searching for electronics gear, Pillow Pets or those other seasonal must-haves, there are some money-savvy alternatives. And as we tiptoe out of the recession, this just might be the ideal year to give a gift "that keeps on giving": financial wisdom.

Heading into the final sprint of the holiday shopping season, we asked some local financial experts for their suggestions on money-smart holiday gifts for families. Here are their picks:

Cindy Adams

Certified financial planner, Sacramento

Her Top 5:

1. Annual subscription to Kiplinger personal finance magazine, for high school age and older.

2. TurboTax software for those who do their own taxes.

3. "The Little Book of Economics," by Greg Ip, which explains how the economy works in the "real world."

4. Gift certificates to a college bookstore, especially if student is paying for his or her own education.

5. Series I bonds, which can help protect against inflation. Get them at major banks or online from the U.S. Treasury at (www.treasurydirect.gov). Minimum purchase is $25 to $50.

Bruce Kajiwara

Financial adviser, Sacramento

"The Richest Man in Babylon" is easy reading for teens and 20-somethings. Written some 80 years ago by George S. Clason, "it still provides basic money principles that benefit all of us."

A gift that Kajiwara's brother gave his young kids years ago was a coin of each denomination (penny, nickel, dime, half-dollar, etc.), plus a dollar in both coin and paper currency. "It's a good start for that first piggy bank," CPA Kajiwara said, and can lead to family discussions of money and how it's used.

When his kids were young, Kajiwara asked relatives to split their gift amounts: half in the form of presents; the other half donated to the child's college fund.

"The kids won't know any difference (until they get older), but it can be a good start/addition to their college fund," said Kajiwara, who said his family applauded the idea. "It's important to have the college fund set up so that relatives are not giving 'unallocated funds' to the kids' parents and can make deposits directly to the college account." Alternatively, he added, if givers prefer to retain control, they can set up their own college savings account with the child named as beneficiary.

Karyn Hodgens

Children's financial educator, Rocklin

The owner of Kidnexions, a financial education company, Hodgens listed her gift picks by category.

Preschool/elementary

From the website Themoneymammals.com, she likes: "The Money Mammals," a DVD and picture book that uses animal characters to teach kids about saving money; "Saving Money is Fun," a CD with "toe-tapping music"; and "Share & Save & Spend Smart" jars that teach kids there is more to money than spending it.

She also likes the Berenstain Bears' books "Trouble with Money" and the "Mad, Mad, Mad Toy Craze." Another favorite is "Alexander Who Used to Be Rich Last Sunday," by Judith Viorst.

For games, "Monopoly Junior" and "The Allowance Game."

Upper Elementary/Middle School

Here are her ideas:

• "Not Your Parents' Money Book" by parent/author Jean Chatzky, aimed at middle-schoolers.

• A wallet or purse: "Kids feel grown up carrying their student IDs and an occasional dollar or two," said Hodgens. "Don't forget to seed the gift with a little 'moolah.' "

• "The Game of Life" board game. (When playing any game, discuss the money issues at hand, says Hodgens. "Kids don't necessarily make the money connections unless you talk about them.")

For parents

Some book ideas: "Raising Money Smart Kids," by Kiplinger personal finance editor Janet Bodnar, and "Raised for Richness," Hodgens' own book, a guide to teaching healthy money habits to kids ages 6-to-16.

Gifts from family

With compound interest, "Your kids will thank the relatives one day" for these gifts:

• Contribution to a 529 college fund.

• Stock certificate(s): Try www.sharebuilder. com or other sites that let you purchase stocks in small amounts.

• Kid-friendly mutual funds, such as Monetta Young Investor Fund.

Cynthia Meyers

Certified financial planner, Sacramento

Although investors usually have little control over how their investments perform, we "do have control over how we react to financial markets and events," Meyers said.

Two books she likes for insights on "how we interact with our finances – and with life – by better understanding ourselves":

• For the technical-minded, Jason Zweig's "Your Money and Your Brain" explains how our biology influences our financial decisions. It's filled with research and fun facts.

• "My Stroke of Insight" by Dr. Jill Bolte Taylor, a neuroanatomist, is a gripping account of Taylor's stroke and what she learned during eight years of recovery. She explains the differences between our left/right brain hemispheres and offers practical tips for developing them to "live a richer, more fulfilling life."

A meaningful stocking stuffer for kids or grandkids is a silver coin, such as an American Eagle. Children get "the immediate gratification of owning something shiny and 'treasure-like,' " said Meyers, and by tracking silver prices online or in the newspaper, "they can learn how value builds over time."

A typical 1-oz. silver coin costs around $30; American Eagle coins are slightly higher. Both can be purchased at reputable coin shops.

Tina Florence

Certified financial planner, Folsom

She recommends two personal finance books: "The Wall Street Journal Guide to Starting Your Financial Life," by Karen Blumenthal and "The Wall Street Journal Complete Personal Finance Guidebook," by Jeff D. Opdyke.

The first is "a favorite to give to young folks just starting out and learning the basics of spending, saving, debt and investing. The second choice advances those concepts further for more mature investors," Florence said.

Geoff Howard

Financial consultant, Charles Schwab, Roseville

It's not for everyone but for those of means, the ultimate form of giving this holiday season: Paying someone's medical or education bills. If paid directly to the medical provider or educational institution, there's no gift tax to the donor and no limit on the amount given.

"If you're in a position to do that, it'd be an Oprah-Winfrey moment," said Howard. "You could do something unexpected for someone that could be quite remarkable."

Happy financial shopping.

Have a personal finance question? Call The Bee's Claudia Buck at (916) 321-1968.

Personal Finance

Sunday, December 12, 2010