U.S. Economy Shows Signs of Turnaround
ADRIAN FINIGHAN, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: A jobs shocker: The U.S. economy shows signs it is finally turning the corner. Now hiring, Google turns its back on the recession. We speak to CEO Eric Schmidt. And the wait is over FIFA tells the world who is playing who in the 2010 World Cup. Hello, I'm Adrian Finighan, in for Richard Quest. This is QUEST MEANS BUSINESS. A very good evening to you. The great U.S. recession may finally be over. According to the latest numbers the economy is growing again. Shedding far fewer jobs than just about anyone had expected. Tonight, on QUEST MEANS BUSINESS we ask, is the worst over? But first, the news we all want to know, who is playing who in the first round of the World Cup in South Africa next year. CNN's Pedro Pinto is in Cape Town. He has been following the progress of draw. You may well have been watching the special that he anchored, which ended just a few moments ago. I tell you, Pedro, you played a blinder mate, it was just an exciting hour, that show you did there. And I tell you, if the competition, itself, is as exciting as the draw. We are in for a great tournament.</s>PEDRO PINTO, CNN INT'L. CORRESPONDENT: You are absolutely right. I've got one word for you, Adrian, that is, "wow!" Because the excitement here, the electricity in the air, in Cape Town, as we have seen in other points around the world there, has been fantastic. We have been getting feedback from all over the planet, online, as well. And everyone has been giving their opinions on this draw, as we have the 32 teams divided into eight groups of four. And now know what the opening match of the World Cup will be. We have South Africa versus Mexico, on the 5th of June. That will be in Johannesburg. Also, on the same day we have a match in the stadium right behind me, Green Point Stadium, here in Cape Town. It will be Uruguay versus France. Uruguay, two-time world champions, France lifted the trophy back in 1998. Now, I know you are not English, you are Welsh, Adrian, and maybe you will be following England as a fan, but you have got the United States, Algeria, and Slovenia. A lot of people are thinking that is a pretty easy group. Now, I don't know if we have a chance to through the whole eight groups, here. Maybe we can have a chance to do that, because this is still a developing story. It is still breaking news. Here we go, as we take a look at Group C, but Group A, we have South Africa, Mexico, Uruguay and France. In Group B we have Argentina, South Korea, Nigeria and Greece. In Group C -- we've got you through the groups right now. We are going through them pretty quickly. We just saw Group C, England, United States, Algeria, and Slovenia. In Group D, Germany, Australia, Serbia and Ghana. In Group E, the Netherlands, Japan, Cameroon, and Denmark. We have Italy, the current holders, New Zealand, Paraguay, Slovakia, first-timers in Group F. In Group G, everybody is calling this the group of death, Adrian; Brazil, North Korea, Ivory Coast, and Portugal. And finally, in Group H, Spain, Honduras, Switzerland, and Chile. So, we have some great matches to look forward to.</s>FINIGHAN: I noticed the way you, as a Portuguese, skimmed over that there. That group of death, with -you are not too happy about that, are you? With Brazil, there?</s>PINTO: No. No, I'm not. And I think the Ivory Coast is the strongest African team out here as well. So, what is curious, Adrian, is that we have actually got three players on the Portuguese national team who were born in Brazil. They got citizenship, so maybe they can give us some inside information on what Brazil can do. But obviously we know they are great players. Starting, obviously, with the former world player, (inaudible), up front, Luis Fabiano, was their top scorer during the qualifying campaign. But so many players here. And it will be curious to see whether Hornel Dinuo (ph) is going to be part of the squad. He hasn't played for Manager Dunga for a while. So much to talk about, Adrian, we are just getting started.</s>FINIGHAN: Absolutely. Pedro, our coverage continues over the next few hours here on CNN. And you are going to be anchoring it for us, right there, live in South Africa. Pedro Pinto, reporting live there from The Draw, there in South Africa. Apologies, by the way, if you are seeing something completely different as we started our show tonight. I don't know what was causing that. But technical problems, apparently. Now, to more mundane matters, I'm afraid I could talk football all night, but we have got to get away from it. The U.S. jobless rate: At least it is fairly good news. It is on the way down. Falling back from a 26-year high. Now it is a startling sign of hope for more than 15 million Americans who are out of work currently. The U.S. jobless rate now stands at 10 percent. Employers cut just 11,000 jobs in November. That is the smallest number of monthly layoffs since the recession began. And it is far, far below what many analysts had forecast. Each of the previous three months has seen 135,000 people let go on average. And economists have been expecting, this time around, 125,000 jobs to vanish in November. Let's get more on those surprising job numbers. Felicia Taylor joins us now live from the New York Stock Exchange. And the markets are none-too happy, with what the rest of us consider to be quite good news, Felicia.</s>FELICIA TAYLOR, CNN INT'L. FINANCIAL CORRESPONDENT: Well actually, Adrian, at the very open the bulls were sent running. I mean, we had triple digit gains, initially. Just that they weren't able to sustain it. Right now the Dow and the S&P; are -well, the Dow is off, the S&P; is just up fractionally, as is the Nasdaq. The Dow, they both though, the Dow and the S&P; touched new 14-month highs, then investors started to take some profits off the table. It is a Friday. They may not want to hold onto those positions as long, going into the weekend. Also, we have seen a stronger dollar. And gold prices are loosing a little bit of their luster. That also brought stocks back from their session highs. Gold, by the way, is down more than $40. But, you know, one stock that we are keeping an eye on is Unilever. That is also down today. And according to the FDA the company has recalled 10 million cans of the diet drink Slim-Fast. So, if that is something that you a buyer of, you might want to be a little bit more beware. Let's go back to the job front. While no one welcomes job losses, the 11,000 jobs lost in November, is definitely positive news. It marks the smallest number of lost jobs in two years. And continues what has been a fairly stead decline in the number. President Obama kicked off his multi- city tour in Allentown, Pennsylvania today. And he focused on jobs and the economy. Let's hear what he had to say.</s>BARACK OBAMA, PRESIDENT OF THE UNITED STATES: There are going to be some months where the reports are a little better. Some months where the reports are worse, but the trend line right now is good. The direction is clear. When you think about how this year began, even before I was sworn in, and we were losing 700,000 jobs a month, a month. Today's report is a welcome sign that there are better days ahead.</s>TAYLOR: So that positive sentiment did play out initially, on Wall Street. Like I said, we had triple-digit gains at the outset. It is just that unfortunately, we weren't able to sustain it throughout the entire session, Adrian.</s>FINIGHAN: Felicia, although it is good news that the job losses are slowing and the markets have their own reasons for not really appreciating that, I suppose it means if the economy is improving interest rates are going to rise. That's what has impacted stocks today. But it is job creation that is the key, isn't it, to a proper recovery?</s>TAYLOR: Keep in mind, though, when it comes to interest rates I highly doubt, that many people think it is going to happen any time soon. In terms of them creeping higher, but you are right, that did impact the stock market. There are signs that employers may soon also be hiring again. And that could come as soon as the first quarter of next year. We saw a little bit of a hint of that in today's report. The average work week rose to more than 33 hours. And that could be a precursor for future hiring. Employers typically add hours for current workers before they actually hire new employee. In addition, 52,000 temp workers were hired and employers, again, typically add temp workers before hiring full-time employees, as well. So, like I said, we saw the unemployment rate dip to 10 percent, the conventional belief is that it will rise again, though, in 2010. The numbers are still staggering when it comes to unemployment; 15 million Americans are without a job. They are going to have to compete against 10 million people who are under-employed. Those are people who work fewer hours than they'd like to, or they have actually even given up looking for work altogether, because the prospects seem and feel so dismal. Economists say it could take literally years for the economy to generate enough kinds of jobs, for everyone, to significantly bring down the unemployment rate. But I have to tell you that when it comes to the World Cup, I genuinely believe that the United States is going to make an upset.</s>FINIGHAN: You think so? Aha, we are not going to let you.</s>TAYLOR: Oh, yes.</s>FINIGHAN: Of course, England and the U.S.A. in the same group. (LAUGHTER0 Felicia, great to talk to you. Many thanks, indeed. Have a great weekend. Felicia Taylor, live at the New York Stock Exchange. Let's get some more reaction now on those job numbers. From Tig Gilliam, the CEO of Adecco, North America, who joins us now live in New York. Tig, before we get to dissecting these numbers then, and explaining their relevance there is something that has been bothering me all day today. How could some of the best economic minds in the country, when they were looking forward and estimating what we were likely to hear, from those jobs figures today, get it so wrong? I mean, we were expecting, what, 125,000, 130,000, in the end it was just 11,000?</s>TIG GILLIAM, CEO, ADECCO, N.A.: Well, Adrian, I'm not an economist, but I can tell you that the BLS data has an error rate of about, plus or minus about 100,000 jobs. So when we say we lost 11,000 jobs that is essentially no growth and no loss in terms of the reliability of the data. It is the best data we have. And I think the other thing that happened in this survey is that we found in September and October there were revisions upwards. So there were 160,000 jobs that were initially reported as losses in September and October. And in the revisions they said that didn't really happen. So, there was an improvement to history that probably couldn't have been baked into some of those forecasts.</s>FINIGHAN: All right. So, let's take a closer look at this. Good news then, I suppose you have to look at it as good news, even though 11,000 more folks have lost their jobs in the past month, but this time yesterday, around President Obama's job summit, we were saying that job creation really is the key to a recovering economy, isn't it?</s>GILLIAM: Absolutely. And there are two factors in this job report that from my point of view are more important than the 11,000 losses, or the 10 percent unemployment. And that is the fact that the average workweek rose to 33.2 hours. This is what we need to see; that the existing workers are being fully utilized before we will see job growth. The second trend is in temp employment. In October we had 33,000 temporary job additions in the U.S., and now 52,000 in November. And that is always a leading indicator to growth in the overall job market.</s>FINIGHAN: So, as far as you are concerned, at Adecco, have we now turned a corner? I mean, is there room for the numbers to get worse again next month, or the month after?</s>GILLIAM: I think from a report point of view there is always the opportunity that the numbers will go down more, one month over another. It is the overall trend that matters and I think the trend is moving in the right direction. In terms of Adecco and Ajilon's business in the U.S., since late summer, in most skilled categories, we have begun to see week-over-week increases in employment. And now that has made its way to the overall BLS data. And I think we are moving in the right direction, but it is going to take quite some time before we see the 200,000 and the 300,000 jobs additions that we would like to see every month.</s>FINIGHAN: Tig, we really appreciate your expert analysis. Many thanks, indeed, for being with us. Tig Gilliam, the CEO of Adecco, in North America. Now, the numbers out of the U.S. put investors, as Felicia was saying, firmly in the mood to buy, at first. And all of Europe's markets put in a positive finish for Friday. Here in London shares in British Airways surged 2.8 percent. Pharmaceutical stocks also performed pretty well. But mining stocks slipped back in limited gains for the FTSE 100. Over in Frankfurt, shares in Lufthansa added plenty of value today. In Paris there was a broad rally with shares in EADS and Renault among the top gainers. That staffer firm, Adecco soared more than 7 percent in Zurich, as investors bet on a better global labor market. Much more analysis to come here on QUEST MEANS BUSINESS. Now we have just had the big decider and no one has even kicked a ball yet. The World Cup draw is in and we'll hear what fans are making of it, when we come back. Don't go away.