Posts Tagged ‘recession’

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Wall Street Hurt Just As Much As Everyone Else

Wednesday, March 3rd, 2010

In terms of job creation for the mid-level managing types, yes, they too are hurting.

  • While the market has somewhat recovered and stabilized in the past year or so, and big banks have begun to bounce back, former mid-level executives of banks and financial firms have had a hard time finding work.
  • Many banks and finance companies fear that the stock market boon that helped catalyze the recovery in 2009 may not last, and, to make matters worst, that pending trading regulations will inhibit profitability.
  • It may take months for banks and financial companies to start hiring mid-level executives, but there are currently a plethora of opportunities for senior-level bankers and executives.

Facts & Figures

  • Financial companies have cut nearly 80,000 securities, commodities and investment jobs in the United States since mid-2008.
  • During the recession, New York’s financial services sector shed 44,200 jobs (a 6.1 percent reduction).
  • All told, Goldman Sachs cut 4,800 jobs, Citigroup, 75,000, Bank of America, 45,500, JPMorgan Chase, 23,700, and Morgan Stanley, 8,600.

Best Quote

“The reality is that you get used to a certain level of compensation that is hard to match elsewhere.” – Matt Prendergast, Former Managing Director at Bear Stearns

The Economy Is Looking Up, But That Might Not Mean More Jobs Tomorrow

Friday, February 26th, 2010

For now it seems as though the eye of the storm has passed, but we’re not out of the woods yet, especially those of us looking for jobs…

  • Throughout the course of a nation’s economic history, job markets fade and expand, but this recession has thrown a wrench into this natural process of economic evolution—some of the jobs lost in this recession will never come back.
  • With corners being cut and companies outsourcing work to more efficient producers, businesses have altered their business and learned new techniques and methods for doing more with less.
  • Though the economy is beginning to recover and jobs are coming back, the rate of job creation has slowed considerably. That, coupled with many people joining and rejoining the workforce, means that unemployment and economic growth indicators will continue to be somewhat stagnant in the foreseeable future.

Facts & Figures

  • Nearly a quarter of the 8.4 million jobs have been lost since 2007 won’t ever be coming back.
  • About 133,000 jobs will be created each month of this year, but economists predict that the unemployment rate will fall only to 0.3% by year’s end.
  • In order for unemployment to fall at a faster rate, economists say that over 200,000 jobs will need to be created each month.

Best Quote

“There’s a certain Darwinian angle to recession. Firms that survive are stronger for having the experience. They tighten down and look for ways to cut waste.” -–Sean Snaith, Economist at the University of Central Florida.

Discount Fever Breaks at High-End Retailers

Tuesday, November 24th, 2009

Expensive retail stores such as Saks Fifth Avenue and Neiman Marcus are retraining customers to paying high prices for exclusive goods this holiday season…

  • Retailers have driven prices up and maintained sales during this fall by keeping inventory low and promoting a sense of exclusivity.
  • Over the past year, consumers became accustomed to seeing large discounts not only at “big-box retailers” such as Walmart, but also at high-end stores such as Saks.
  • Earnings are improving for large stores because they are selling more items at full price, as opposed to same amount of items at discounted prices (as in Fall / Winter 2008).

Facts & Figures

  • In the fall and winter of 2008, merchandise in luxury stores was discounded as much as 50-70% off full price
  • Inventory at Saks is down by double digit percentage points compared to last year
  • By keeping inventory low this holiday season and playing up the exclusivity factor, retailers can keep items at their full price

Best Quote

“What’s luxury retailing about? It is about a scarcity of supply.” – Stephen I. Sadove, Chairman and Chief Executive of Saks Fifth Avenue

Size Isn’t What Matters In Philanthropy

Monday, November 23rd, 2009

While celebrity philanthropists tend to dominate the headlines, charities are waking up to the importance of cultivating a base of modest givers.

  • Many organizations are responding to the recession by casting a wider net for more donors who can give smaller amounts.
  • Fidelity Investments, which houses the largest pool of donor-advised funds, used to require all outgoing donations be at least $100. A year ago they dropped the minimum to $50.
  • Small grants have produced some of the more important success stories, including the $96,691 that the Ford Foundation gave to Mohammed Yunus to found the Grameen Bank (which specializes in providing financial services, including microcredit, to impoverished people in Bangladesh).

Facts & Figures

  • March of Dimes recently raised $6 million at Kmart checkout lines, where shoppers were asked to add a manageable $1 donation to their purchase.
  • Global Giving, an online fundraising organization, has raised $22 million since it started in 2002, with an average donation of just $54.
  • After the disastrous Southeast Asian tsunami in 2004, Americans gave $2.78 billion in aid. The median gift was $50; the average gift was $135.

Best Quote

“We are deluded by the attention paid to the large contributors in our country. Small checks coming through the mail are the bread and butter for most organizations.” – Wendy Smith, Author of Give a Little: How Your Small Donations Can Transform the World

U.S. Nonprofits Brace For Less Cheer This Holiday Season

Thursday, November 19th, 2009

American-based charities are still reeling from the significant decline in charitable contributions and starting to prepare for a lean holiday season.

  • The same number of people are giving money to  nonprofit organizations as before the recession, just with smaller donations.
  • Many nonprofits are having to make the tough decisions to cut back on staff while the demand for their services has only increased.
  • Charities report that volunteerism is up this fall.

Facts & Figures

  • 74% of Americans plan to increase their charitable giving once the economy improves.
  • The most successful fundraising organizations expect to see their income go down by an average of 9% this year.
  • State unemployment rates remain at 10%.

Best Quote

“I say this to our staff all the time: ‘Our mission is not in a recession.’” – Nancy Brown, CEO of American Heart Association

Consumption Gap Widens Between Haves and Have-Nots

Thursday, November 19th, 2009

While wealthier American shoppers have returned to patronizing high-end department stores, middle class consumers struggle to afford basics at Walmart.

  • Consumers at all income levels are focused on the value of their purchase and on not overspending.
  • Luxury chains report shoppers buying items such as shoes and dresses, while discount stores say their consumers are focused on food and socks.
  • Shoppers focused on saving in these economically tight times cannot afford to purchase items outside of the bare essentials.

Facts and Figures

  • The wealthy reigned in their spending most severely during the financial meltdown last fall.
  • Walmart has had to lower their prices to encourage their regular shoppers to continue buying.
  • Nordstrom’s third-quarter profit rose as sales improved compared with 2009.

Best Quote

“I used to consider shopping enertainment, but now I don’t think it’s enertainment.” – Patricia Murnane, Shopper and Risk Manager from New York

David Beckham May Be the King of Retail… In Madrid Anyway

Thursday, November 19th, 2009

Cristiano Ronaldo, soccer’s most expensive athlete, did not trigger a merchandising monster sale on the same scale as David Beckham did when he started playing for Real Madrid.

  • David Beckham, former English soccer team captain and Manchester United star, came to Real Madrid in 2003 with a large contract in hand and with high merchandising expectations. Basically, he sold a lot of jerseys!
  • Cristiano Ronaldo, the Portugese star forward, was the 2008 FIFA world player of the year and also came from Manchester United to Real Madrid.
  • The lack of jersey sales is somewhat being blamed on the economy, but perhaps it also indicates that Ronaldo is just not as popular as Beckham.

Facts & Figures

  • Ronaldo signed a new $133 million contract with Real Madrid in June, which is approximately three times more than Beckham received when he joined the club.
  • When Beckham joined Real Madrid, team income soared 27%. With the addition of Ronaldo in 2010, team income is expected to rise 3.5%.
  • Real Madrid jersey sales are roughly 20% lower now than they were during the Beckham era.

Best Quote

“There was a spike when Cristiano Ronaldo signed in the summer but there’s not such a big demand now. The economic crisis is taking its toll.” – Eugino Martinez, Shop Owner in Madrid, Spain

Investments in Art Roaring Back

Friday, November 13th, 2009

Huge sales continue to beat expectations as collectors and investors start to buy art again.

  • Pieces by Andy Warhol, David Hockney and Alice Neal were among large lots sold for prices that have not been seen since before the recession.
  • Large auction houses like Sotheby’s or Christie’s host auctions and then take a percentage of the sale price of every lot.
  • Auction houses lowered expectations by 50-75% so that when they make large sales, it looks as if the numbers are better than they actually are. Still, selling a large amount of high-priced art is impressive, regardless of the recession.

Facts & Figures

  • Warhol’s 1962 “200 One Dollar Bills” sold at a Sotheby’s auction for $43.8 million. The seller originally paid $385,000 for the piece in 1986.
  • The Sotheby’s auction totaled $134.4 million against the company’s earlier/ estimate of $97.7 million.
  • Sotheby’s highest auction total was $362 million in May of 2008.

Best Quote

“The art vacation is over. Art has come back more than stocks or housing.” – Jack Tilton, New York Art Dealer

Buying Shoes Apparently The Thing To Do In A Recession

Tuesday, November 10th, 2009

Shoes have been selling increasingly well despite the recession, due to what analysts are calling “frugal fatigue.”

  • While other retail sales have faltered, shoes are increasingly weathering the economic storm.
  • According to analysts, shoes cost less than other items of clothing (even in a good economy), so more people can afford to spend on shoes regardless of their size or economic situation.
  • Shoes are considered more of a necessity than handbags, beautiful dresses or nice suits. And shoes wear down and need to be replaced more quickly than most articles of clothing.

Facts & Figures

  • Shoe sales were at $1.5 billion in October 2009, highest since October 2006.
  • Sales increased 7.9% compared to one year ago.
  • J.C Penney, Dillard’s, and other major retailers cite shoes as one of their best-selling product categories.

Best Quote

“Shoes democratize fashion. You probably can’t buy a Zac Posen dress if you wear a size 14, but you can buy a pair of Jimmy Choo shoes.” – Kathryn Finney, Writer for the Budget Fashionista blog

New GDP Figures Turn Decline Upside-Down

Friday, October 30th, 2009

Could the Great Recession be over because the GDP did not shrink for one quarter?

  • The gross domestic product of the United States grew at a rate of +3.5% in the third quarter of 2009, which is the same amount as the average growth rate of the last 80 years.
  • Although jobs are still sparse and the housing market is still in bad shape, government programs helped encourage consumer spending on all sorts of goods.
  • There is still a risk of slowed growth or a dip in GDP because the third quarter’s growth can be attributed in part to strong stimulus packages, which will expire in coming months.

Facts & Figures

  • The stimulus packages that encouraged growth in GDP include the $787 billion package approved in the winter of 2008-2009 and the Cash for Clunkers program.
  • Jobless rate reached 9.8% in September 2009, despite GDP growth.
  • American exports (goods being sold outside the country) grew at an annual rate of 14.7% and imports (goods coming in from abroad) grew at a 16.4% annual rate.

Best Quote

“The big-picture perspective is that things have improved. The question is, how sustainable is this growth going forward?” – Jan Hatzius, Chief U.S. Economist at Goldman Sachs

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