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Unemployment Rate Darts to 6.5%; Up 40BP from September
November 7, 2008
The nation’s unemployment rate shot up in October, to 6.5%. That marks an unemployment rate which is higher than the downturn the country saw following 9/11, when the unemployment rate peaked at 6.3% in June of 2003. In fact, the unemployment rate hasn’t been this high since 1994.
A chart of the national unemployment rate going back 50-years is below, providing some context to today’s number.
Significant Rate Cuts Across Europe; Oil Below $65; LIBOR Plunges to 4-Year Low
November 6, 2008
European Central Banks made deep cuts in interest rates today. The European Central Bank (ECB) cut rates by 50 basis points to 3.25%. The Bank of England made its biggest cut in 27 years, cutting its key interest rate by 150 basis points to 3.00%.
Other banks which also lowered rates were the Swiss National bank, which cut by 50 basis points to 2.00% (second reduction since 2003), and the Czech Republic’s central bank cut rates by 75 basis points to 2.75%.
Libor Rates have also plunged to 4-year lows. The latest Libor Rates are as follows:
- 1-Month: 1.956%
- 3-Month: 2.506%
- 6-Month: 2.823%
- 1-Year: 2.968%
September 2008 Unemployment Numbers
November 6, 2008
California’s unemployment rate held steady at 7.7 percent in September, after climbing by 1.5 percentage point over the four previous months. The U.S. unemployment rate held steady in September at 6.1 percent, after rising by 1.1 percentage point over the four previous months-including a 0.6 percentage point jump in July and August combined. The chart shows the three-year trend of the California and U.S. unemployment rates.
California’s unemployment rate rose by 2.1 percentage points over the last year and by 2.8 percentage points over the last two years. The U.S. rate rose by 1.4 and by 1.6 percentage point over the last one and two years, respectively.
If you are interested in reading the entire 2008 unemployment report, you may view it here.
In Santa Clara County, the unemployment rate also held steady at 6.5%.
Silicon Valley Layoff Announcements
November 5, 2008
Another day….and another set of layoff announcements around the valley. The latest companies to announce layoffs are:
- LinkedIn - Mountain View, CA
- 10%, or 36 employees
- AMD - Sunnyvale, CA
- 3%, or 500 employees
- cuts to be global
- Cadence - San Jose, CA
- 12%, or 625 employees
- Intersil - San Jose, CA
- 9%, or 140 employees
Measure V and Measure W in Redwood City Fail to Pass
November 5, 2008
Two controversial measures in Redwood City failed to get enough votes to become law. Measure V and Measure W, which would have required require two-thirds voter approval for development on Open Space lands (measure W) and on Cargill’s salt flats (Measure V) were struck down. Measure V was voted down by a margin of only about 1%.
As a result of the failure of these two measures, the laws in Redwood City will remain unchanged.
The funding to oppose Measure W came almost entirely from Cargill and its development partner, DMB Associates. The funding that opposed Measure V came from Save the Bay and company.
Google Scraps Yahoo Partnership
November 5, 2008
After months of working to overcome anti-trust issues, Yahoo (YHOO: 12.86 +0.08%) and Google (GOOG: 328.05 +2.09%) have called off their “strategic partnership” that would have Google selling ads on Yahoo web properties. Yahoo struck this partnership in a move following it fighting off Microsoft, which earlier this year offered $33-36 per share for the internet company, which now represents a 3x premium to today’s price.
Regardless, the failure of this deal will likely put Yahoo in play again for Microsoft, or might even open the door to another partnership involving AOL. Either way though, I suspect there will be additional layoffs at Yahoo through early next year. They’ve announced 1500 so far and word is that there is another round of layoffs just as big set for early next year.