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from MacroScope:

Asian Americans hit hardest by long-term unemployment

Asian Americans have the highest rate of long-term joblessness of any ethnicity in the United States, according to a report from the Economic Policy Institute, a liberal think tank in Washington.

Last year marked the second year in a row that Asian Americans had the largest share of unemployed workers who were unemployed long term (i.e., for six months or more). In 2011, 50.1 percent of the Asian American unemployed were unemployed long term, up from 48.7 percent in 2010. In both of these years, the Asian American share slightly exceeded the African American share.

Federal Reserve Chairman Ben Bernanke and other central bank officials have argued long-term unemployment is an enormous challenge, but have been reluctant to apply additional monetary stimulus to the problem. In March, Bernanke said:

Although most spells of unemployment are disruptive or costly, the persistently high rate of long-term unemployment we have seen over the past three years or so is especially concerning.

from Global Investing:

Three snapshots for Thursday

The Bundesbank is preparing to stomach higher German inflation than it likes, above the European Central Bank's target level, because of the euro zone crisis, a source at the central bank said on Thursday.

Although the Bundesbank still wants stable prices across the euro zone, its latest comments show the bank recognises that upward pressure on German wage costs and property prices suggest its inflation is likely to rise above the bloc's average.

As this chart shows, historically the Bundesbank was quick to react to any signs of inflation:

The Bank of England voted on Thursday not to give the struggling economy another injection of cash as concerns over stubbornly high inflation outweighed the risk of a prolonged recession.

The number of Americans submitting new applications for jobless benefits edged down last week, easing concerns the labor market was deteriorating after April's weak employment growth.

from MacroScope:

Jobs or inflation — Is the Fed distracted?

The Federal Reserve doesn’t get much love from Washington these days but it did receive a rare bit of political backing on Wednesday as Democrats defended its role in promoting full employment as well as stable prices.

The U.S. central bank has been the target of criticism from members of both political parties as a result of bank bailouts and hands-off rule-enforcement that let predatory and unsound lending practices go unchecked, among other shortfalls.

But discussing legislation narrowing the Fed’s mandate to a single-minded focus on price stability, Democrats questioned the need to drop the full employment side of the dual mandate.

“Is it a problem?” asked Minnesotan Keith Ellison. “To the degree that we have problems with monetary policy, is the dual mandate the cause?”

Ellison said that far from distracting the Fed, the lofty 8.1 percent unemployment rate should get greater attention. “This is a national disgrace,” he said.

Ron Paul, a presidential candidate who chairs a subcommittee on domestic monetary policy, held a hearing to discuss several pieces of legislation changing the Fed’s mandate. Two of these would limit the Fed’s focus to price stability.

With partisan divisions and other priorities, Congress is unlikely to make any changes to the Fed’s mandate this year. But the effort could gain momentum if Republicans control both houses of Congress after November.

from Breakingviews:

Obama’s job creation hopes look fragile

By Martin Hutchinson The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Barack Obama can at last say he has presided over increased employment in America’s private sector, if not in government, since he arrived in the White House in January 2009. But the slowing pace of job creation evident from Friday’s monthly report and declining labor force participation could make for a tough sell in November’s elections.

To be fair, the jobs picture for April is better than the headline 115,000 increase suggests. Another 53,000 jobs were added through revisions to numbers for February and March, and a tick downward in the unemployment rate to 8.1 percent also helped the narrative. And with government shedding 15,000 positions last month, private sector gains were larger than the top-line figure. They were sufficient, in fact, to put jobs in private businesses 35,000 into the black since his inauguration - a landmark of sorts.

There are, however, still 607,000 fewer federal, state and local government workers than in January 2009. At last month’s pace, Obama may be able to claim by November that employment has recovered to a higher overall level than when he took office. The story, though, is undermined by a pace of job addition so slow that an updated Breakingviews calculator indicates it would take until almost 2030 to achieve full employment in the United States.

Meanwhile, with jobs hard to come by, participation in the labor force declined further to the lowest level since September 1981. The only age group becoming more likely to work in recent years is the 65s-and-over. Politicians should worry about the decline in participation by young and traditionally working-age people. It foreshadows long-term disengagement and potential social problems.

That backdrop may well dog the next president whether it’s Obama or Mitt Romney, the Republican challenger. Which man makes it to the White House will depend partly on economic and employment trends in the next six months, both real and perceived. Obama will be hoping the soft patch for jobs gives way to a brighter picture in short order.

from Global Investing:

Three snapshots for Wednesday

Euro zone factories sank further into decline last month but manufacturers in Asia upped their tempo to meet growing demand from the United States and China, exposing a widening gulf between Europe and the rest of the world.

Unemployment in the euro zone rose to a 15-year high of 10.9 percent in March - as this chart shows the level of youth unemployment paints a worrying picture:

U.S. private employers hired a far fewer than expected 119,000 people in April, the smallest gain since September 2011, a report showed on Wednesday, adding to concerns that the economy has lost some of its momentum. This chart shows the relationship between the first release of ADP figures and non-farm payrolls which are released on Friday.

from Global Investing:

Three snapshots for Tuesday

U.S. consumer confidence came in slightly weaker than expected but the 'jobs-hard-to-get' index - historically a good lead indicator of the unemployment rate - fell to 37.5 in April.

Spanish equities in price terms are near their 2009 lows but valuations are still some way above:

Australian consumer prices rose by less than expected last quarter while key measures of underlying inflation showed the smallest rise in more than a decade, paving the way for a cut next week and suggesting further cuts were possible.

from Unstructured Finance:

UF Weekend Reads

Nice weather today in NYC. Enjoy it today before Sunday's deluge. Here's Sam Forgione's picks. You can now follow Sam on twitter @samuelforgione

From The New Yorker:

Nicholas Lemann explores new books that illustrate the ties between politics and the economy.

From BusinessWeek:

Lazard's Michele Lamarche takes on the tough task of courting debt-strapped nations.

From Harvard Business Review:

from MacroScope:

An upward bias in jobless claims revisions

Weekly data on applications for unemployment benefits have gained renewed importance since a weak March payrolls number left economists wondering whether a tentative labor market recovery was about to cave again. The last two weeks’ readings were just soft enough to leave investors thinking the country’s unemployment crisis may not be healing very quickly.

Daniel Silver at JP Morgan has dug deeper into the claims figures and found a curious trend: a repeated and distinctive tendency toward upward revisions in the numbers.

There has not been a downward revision to the initial claims data reported for the prior week since the start of March 2011, and this recent streak is not a new phenomenon—there have been upward revisions in about 90% of the weekly reports since the start of 2008, as well as going back even further to the start of 2000. These revisions are relatively minor (usually adding only a few thousand claims) and do not change the broader trends in the data, but they can lead to the weekly claims reports showing decreases to the more recent levels, whereas if the prior week had been unrevised, the reports would have shown increases in claims.

What is the reason behind this? Silver identifies two possible sources: backdated claims and interstate applications, which take an extra week before they make it into the report.

As for what happened in the latest week -- claims were revised up by 8,000 to 388,000. That's just teetering around the level that economists believe separates an improving labor market from a deteriorating one.

from Global Investing:

Three snapshots for Thursday

Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 386,000, the Labor Department said. The prior week's figure was revised up to 388,000 from the previously reported 380,000.

The four-week moving average for new claims, considered a better measure of labor market trends, rose 5,500 to 374,750.

Brazil's central bank raised its key interest rate for a fourth straight time on Wednesday as it seeks to rein in persistent inflation, and indicated more rate increases could be on the way soon. This follows a 50bps rate cut from India earlier in the week.

from MacroScope:

What have a trillion euros done for the economic outlook? Not much yet

The trillion euro sugar rush that made Q1 the best start to the year for global stocks in more than a decade has already worn off, but what is most striking is not how quickly it ended. It’s how little the economic outlook has changed.

Cheap central bank money mainly seems to have boosted stocks and the optimism of stock market forecasters, who generally are the most bullish of the lot with or without wads of cheap money.

An analysis of Reuters Polls over the past three months, starting just before the European Central Bank made the first of two gargantuan injections of cheap three-year money into the banking system, reveals what many have fretted might happen.

Derived from professional market forecasters and economists, they showed that the cash would probably do a lot to push up asset prices in the short term but do little to help a stalled euro zone economy with rising unemployment.

The consensus for Q1 euro zone GDP has stagnated at a quarterly contraction of 0.2 percent in the past three monthly Reuters polls, starting from the December poll, taken before the ECB’s first of two long-term refinancing operations (LTROs).

Over the same period, the outlook for 2012 growth as a whole deteriorated from none at all to a mild 0.3 percent contraction.

Frankfurt's DAX had its best Q1 since 1998, up a staggering 18 percent. European shares more broadly rose 7 percent - still, the kind of return an investor might hope to get during a good year, not three months.