BetterTrades Blog

On the one-year anniversary of the major indices hitting a 12-year low, the markets remained subdued, as a lack of economic news and corporate earnings to start the week have kept the markets in check.
In corporate news, one of the largest grocery retailers in the U.S., Kroger Co. (KR) made it known prior to the opening bell this morning that the company’s earnings slipped during the 4Q, despite an increase in overall sales totals.
For the quarter, Kroger posted a net profit of $255.4M, or $0.39 per share, compared to a profit of $349.2M, or $0.53 per share, from a year ago, a decrease in net income of nearly 27% year-over-year. Quarterly sales advanced for the grocer, climbing from $17.31B to $18.56B, a jump in revenues of more than 7%.
On average, analysts within the industry were looking for the Ohio-based grocery retailer to post a quarterly profit of $0.34 per share based on total revenues of $17.73B.
During the period, Kroger reported charges related to advertising, warehousing and transportation of $14.38B, up 10% from last year’s tally of $13.09B. However, the company did benefit from a lower LIFO charges, declining from $40.9M a year ago to $1.3M.
David B. Dillon, Kroger’s Chairman and CEO, remarked on the company’s recent performance report, “We are strengthening Kroger’s overall competitive position by increasing the number of households that are loyal to Kroger and earning a greater share of their business.”
For the year, Kroger managed to post an annual profit of $70M, or $0.11 per share, a far cry from last year’s yearly total of $1.25B in earnings, or $1.89 per share. This year’s tally was greatly affected by a $1.05B charge related to write-downs concerning the company’s California-based Ralph’s grocery stores. Excluding the write-off, Kroger would have posted a yearly profit of $1.12B, or $1.71 per share.
Looking ahead to 2010, the company is anticipating full-year earnings to come in between $1.60 and $1.80 per share. Analysts, on the other hand, are projecting Kroger to record a yearly profit between $1.70 and $2.02 per share, with a general consensus of $1.79 per share.
By the sound of the closing bell on March 9, shares of Kroger were trading in the red, giving up $0.55, or 2.4%, to end the session at $22.35 per share. Throughout the past year, shares of KR have traded within a narrow range, reaching a high of $24.80 per share and a low of $19.39 per share.
Operating as one of the leading full-line sporting goods retailer in the U.S., Dick’s Sporting Goods Inc. (DKS) revealed early Tuesday morning that the company recorded a solid profit during the most recent quarter, helped by higher sales.
Reporting for the 4Q, Dick’s booked a net profit of $67.4M, or $0.56 per share, in sharp contrast to last year’s net loss of $105.6M, or $0.94 per share. Last year’s loss was attributed to Dick’s incurring hefty acquisition and integration costs. Sales advanced year-over-year as well, climbing from $1.21B a year ago to $1.34B, an increase in revenues of almost 11%. Additionally, sales recorded at stores open at least one year saw an increase in sales of 2.5% over last year’s totals.
Analysts within the industry were looking for the sporting goods retailer to post a quarterly profit of $0.55 per share based on $1.3B in total sales.
Chairman and CEO, Edward Stack, remarked, “Despite the difficult economic environment of 2009, our associates successfully generated more sales, effectively managed inventory levels, and continued to exercise financial discipline. As a result, we generated higher profits, leveraged expenses, further strengthened our balance sheet and believe we gained market share in 2009.”
For fiscal 2009, Dick’s recorded net income of $135.36M, or $1.15 per share, versus a net loss of $39.87M, or $0.36 per share in 2008. Yearly revenues increased as well, advancing from $4.13B a year ago to $4.41B, a jump in sales of nearly 7%. Analysts were predicting a yearly profit of $1.18 per share on $4.37B from Dick’s.
As for the upcoming year, Dick’s is looking to post a 1Q profit between $0.12 and $0.13 per share, while analysts are predicting a profit of $0.13 per share. For the year, Dick’s is looking to record a profit between $1.32 and $1.35 per share, with analysts expecting $1.32 per share.
Stack later added.”Looking to 2010, we expect to generate double-digit earnings growth and positive operating cash flow while further investing in the long-term growth of the company.”
With the day’s trading complete, shares of DKS were down nearly 1%, losing $0.17 to end the session at $25.45 per share. Throughout the past year, the stock has managed to trade as high as $26.28 per share, while dipping to an annual low of $10.26 per share.
Reporting prior to the start of trading on March 9 was Superior Well Services, Inc. (SWSI), a growing oilfield services company operating in many of the major oil and natural gas producing regions of the U.S. The company’s announcement early Tuesday showed a quarterly loss driven by increased costs and lack-luster sales totals.
For the 4Q, Superior Well Services posted a net loss of $16M, or $0.58 per share, compared to a net profit of $11.8M, or $0.48 per share from a year ago. The lack of revenues played a big part in the company’s dismal performance, as revenues fell more than 40%, from $161,7M last year to $95.9M.
Analysts, on average, were looking for the oil field service company to post a quarterly loss of $0.38 per share based on $94M in overall revenues.
For fiscal 2009, Superior recorded a net loss of $82.6M, or $3.39 per share, well below the previous year’s net profit of $38.7M, or $1.64 per share. Revenues for the year receded as well, falling more than 23% year-over-year to $399.5M. Analysts had predicted a net annual loss for Superior of $2.33 per share based on $398.1M in total sales.
As the markets conclude trading, shares of SWSI were down more than 4% on the day, giving up $0.85 to end the session at $17.11 per share. Within the past year, the stock has fallen to an annual low of $4.11 per share, while reaching a 52-week high of $18.75 per share.
Energy prices reversed their upward trend on Tuesday, curtailing a month-long run in oil prices as a stronger Dollar pushed prices lower. By the close of trading, the price for a barrel of light, sweet crude for April delivery slipped $0.38 to settle at $81.49. The current contract added $0.37 to settle at $81.87 a barrel on Monday.
In additional NYMEX trading, heating oil slipped $0.0157 at $2.0898 a gallon, while gasoline fell $0.0289 to $2.2603 a gallon. April natural gas futures dropped $0.011 to $4.516 per 1,000 cubic feet.
Despite a strengthening Dollar, Treasury prices were higher Tuesday. With the day’s trading complete, the benchmark 10-year note was higher, adding 3/32 to 99 13/32, with a yield of 3.69%, down 0.01% from the day before.
The longer maturing 30-year note was up on the day as well, gaining 6/32 to 99 5/32, as its yield declined to 4.67% from the previous session’s 4.68%. Lastly, the shorter maturing 2-year note was marginally higher, adding 1/32 to 99 31/32, while its yield decreased by 0.02% to 0.87%.
The Forex markets saw the Dollar trade higher versus the majority of the world’s currencies, as the 16-nation Euro declined against the greenback, buying $1.3601, lower than the previous session’s price of $1.3633. The British pound also decreased versus the Dollar, as the Sterling slipped from $1.5072 to $1.4998.
However, the Dollar did decrease in value against the Japanese yen, buying 89.95, down from Monday’s value of 90.25. In additional trading, the Dollar climbed to 1.0751 Swiss francs from 1.0736 but slipped to 1.0261 Canadian dollars from 1.0277 Canadian dollars.
By the sound of the closing bell on March 9, the Dow Jones Industrial average added 11.86 points, or 0.1%, to end the day at 10,564.38, while the broader market indicators concluded the session in the green as well.
The S&P 500 index was higher, gaining 1.95 point, or 0.2%, to finish at 1,140.44, while the tech-heavy NASDAQ composite index advanced as well, adding 8.47 points, or 0.4%, to 2,340.68.

Despite all the economic woes that continue to plague the world’s economies, the price of gold has skyrocketed over the past several weeks. Heading into the December 2 trading session, the spot price of gold for December delivery stood at $1,217 an ounce. The recent surge in price can be somewhat attributed to the continual weakness in the value of the U.S. Dollar.

As of the close of the December 1 trading session, the Dollar Index stood at 74.50, the same point in which the market bottomed over the past few trading sessions. With the equity markets posting solid gains over the past three days, it appears inevitable that the index could slip even further, testing support levels at 74.00 and possibly breaking through.

The affects of a falling Dollar makes the Dollar-dominate gold much cheaper for investors that are holding stronger currencies, such as the Euro, the Sterling and the Yen. Not only is the price of gold reaching record high in terms of the Dollar, but gold has also reached highs valued in other currencies, such as 733.02 pounds and 805.71 Euros per ounce.

As the greenback falls, demand for the precious metal increases as does its price. Gold’s record setting pace can also be attributed to inflationary fears as well as actions taken by the world’s central banks to begin to diversify away from the struggling Dollar.

Having increased by more than 55% over the past year, gold is primarily used in two very distinct segments, the first use being for jewelry, while the other is used for investment purposes. Being used in investments, gold has always been perceived as a safe-haven investment.

Over the past year, gold futures have risen by 37%, while the Dollar has slipped nearly 9% against a basket of six world currencies. In recent trade, gold futures for February delivery on the Comex division of the New York Mercantile Exchange advanced as much as $18.20, or 1.5%, to $1,218.40 an ounce before retreating marginally. The previous high for gold was $1,201.40 an ounce, reached on December 1.

VTB Capital commodities analyst Andrey Kryuchenkov commented on gold’s recent surge, “The market is staring into the unknown. There is little doubt that the market remains bullish and even though we expect trading to subside later this month, the downside is still limited.”

Kryuchenkov later added, “At the moment we favor little profit taking. Resistance could yet prove to be very strong and we are looking for a sustained push above it to signal gains to 1,230 -1,250 dollars.”

In reaction to the record setting price of gold, Canada’s largest mining company, Barrick Gold Corp. (ABX) recently announced that the company was eliminating all of its gold hedges in an effort to capitalize on the rising price of gold. Barrick, the world’s number one gold producer, has done away with the contracts that were used to sell gold at a set price prior to the recent surge.

Because the price has risen so rapidly, Barrick was obligated to sell its gold at a lower price, which reduced their profit margins. The alternative to selling at a lower price was to purchase gold in the open market at higher prices to meet contractual obligations. The practice of hedging is used to protect companies from fluctuations in market price, as well as providing a degree of financial stability within the company’s operations.

Under Barrick’s hedging practices, the company was losing potential revenues each time the price of gold ticked higher. The overall revenue losses could have reached the billions as the price of gold has increased nearly 5-fold since 2001.

Aaron Regent, Barrick’s President and CEO remarked, “Our positive view on the gold price led us to accelerate the elimination of these contracts ahead of the schedule we had established. As of today, we are a fully unhedged gold producer,”

In order for Barrick to purge all existing contractual responsibilities, the company issued equity and debt vehicles worth $5 billion to fund its gold hedges. The company also took a $5.7 billion charge in the 3Q to get the hedging losses off their books, and could take an additional charge of $300 million in the upcoming 4Q, as the company was forced to purchase gold in the open market at an average price of $1,070 an ounce.

Gold’s increase in price has also pushed other precious metal prices higher. Silver for March delivery advanced as much as 1% to $19.395 an ounce, its highest price since July 2008. Additionally, the price of Platinum for January delivery jumped as much as 0.9% to a 15-month high of $1,499.90 an ounce. Palladium for March delivery gained 1.6% to $390 an ounce after reaching its highest price of $392 an ounce in July of last year.

Many analysts believe that the gold market will remain bullish for the near future. Nevertheless, there are some that think the overall trading volume will subside by the end of the month. The downside prognosticators of the market, however, appear to be limited.

Barrick’s announcement to purge all existing hedges could be viewed as an indication to other precious metal producers that companies are confident that gold prices should continue on its upward trend. This trend could lead to potentially sharper price gains in the near term.

In a recent report from the Treasury Department, the government agency revealed that the top 22 beneficiaries of the government’s TARP funds showed the overall value of all outstanding loans declined by nearly $37 billion, or 0.9%, in October. That marked the ninth consecutive month in which banks offering loans decreased and followed a 1.1%, or nearly $46 billion, reduction in September.

According to the report, the outstanding loan balances from the banks tallied $4.12 trillion in October, down from $4.16 trillion in September. In October, the 22 bailout fund recipients originated $240 billion in new loans. Of the new loans initiated, mortgages and commercial loans increased, while new lending declined for home equity loans, credit cards and commercial real estate lending.

In response to the Treasury’s report, Fed Chairman Ben Bernanke commented, “We have told the banks very clearly that we want them to make loans to creditworthy borrowers, where there are borrowers who can repay the loans. Even though the recession may be technically over, in a sense that the economy is growing, it’s going to feel like a recession for some time, because unemployment remains very high, about 10 percent.”
Soon after the release of the report, President Obama approached the nation’s top banks to help the struggling economy get back on its feet by boosting lending to small businesses and to support revisions of financial regulations. Some banks reacted by conforming to the plea by the President, along with curtailing compensation for their employees.

President Obama responded by saying, “America’s banks received extraordinary assistance from American taxpayers to rebuild their industry, and now that they’re back on their feet, we expect an extraordinary commitment from them to help rebuild our economy.” Bankers are asked to “explore every responsible way to boost lending and to take a third and fourth look at every loan application,” the President added.

Kenneth Lewis, CEO at Bank of America (BAC), stated that the bank would lend $5 billion to small-and medium-sized businesses more in 2010 than it did in 2009. Through the first three quarters of 2009, BAC provided more than $12 billion in credit to small businesses, while aiding more than 49,000 small companies with loan modifications that helped increase the businesses’ cash flow.

Bank of America also initiated more than $215 billion worth of loans to mid-sized companies during the same period. However, in September, the bank saw a 6% decline in loans originated, falling to $53.6 billion.
Lewis remarked, “Bank of America is determined to do our part to help the economy grow next year and reduce unemployment by making every good loan we can make. We agree with the President that small and medium-sized businesses are the lifeblood of the U.S. economy. Their ability to prosper and grow is key to job creation to help our nation recover from the economic slowdown.”

Lewis later added, “Our improved financial condition and our optimism about the economy will allow us to step up lending to support these clients. This is only one of the initiatives we are pushing, but it is a very important one.”

JPMorgan Chase & Co. confirmed that they would boost lending by $4 billion in the coming year. Additionally, Citigroup Inc. (C) said that they would increase lending once the bank repays the $20 billion it received from the TARP fund.

In addition, Wells Fargo & Co. (WFC) witnessed its lending plunge more than 14% in September to $47.4 billion. The bank also confirmed that it would repay its $25 billion bailout as soon as they complete a $10.4 billion transaction by selling stock.

With the latest round of news of banks committed to repaying monies from taxpayer support, the government now anticipates more than $185 billion to be repaid in the coming months, with more than $90 billion of that total dedicated in the past two weeks.

Timothy Geithner, Secretary of the Treasury, mentioned, “The government is rapidly unwinding this unprecedented involvement in the financial sector. And as banks repay, as private investment comes in to replace the government’s investments, banks will be in a stronger … position to lend.”

Steve Bartlett, President and CEO of the Financial Services Roundtable, said, “Banks are looking for ways to increase lending although we don’t want to go back into the business of making bad loans, that’s what got us into trouble in the first place. Lending is down because loan demand is down and loan demand is down because of the economy. So, we have to move the economy up and then, lending will increase.”

Many banks claim that they are limited in lending due to factors out of their control, including the economy and tighter oversight regulators. Nevertheless, it could be left up to the banks to lend more in order to stimulate spending and economic expansion, if the economy is to respond positively in the coming months.

Reaching as far back as the 1960s, the Internet was spawned when the U.S., through research projects in conjunction with several military agencies, was contracted to institute a fail-safe and robust computer network. The research, with the help of the National Science Foundation, ignited global involvement in the creation of new networking technologies, which ultimately led to the commercialization of a worldwide network in the mid 1990s,

Today, the Internet provides nearly a quarter of the Earth’s population the freedom to chat online, share and transfer files, play gamed, conduct commerce, engage in social networking, publish materials, watch videos on demand, teleconference and telecommute via the services provided by the Internet.

With people using the Internet for a variety of needs, companies place advertisements on Web pages and search engines to entice sales and product identification. During the first six months of 2009, U.S. companies generated nearly $11 billion in online ad revenues, despite spending 5% less than they had in the same time frame last year.

The 5% decline in spending broke a string of 24 consecutive quarters in which spending increased, dating back to the 1^st quarter of 2003. If spending continues to decline throughout the remainder of the year, it would mark the first time since 2002 that spending posted an annual decrease. From 2006 through 2008, spending increased 35%, 26%, and 11% respectively.

However, the $11 billion in sales did come in 5.3% lower than the first half of 2008. The more than 5% loss represents a total loss in revenues of more than $610 million. Even with the seemingly substantial loss in ad revenues generated, it pales in comparison to the overall advertising industry’s decline, which fell 15.4%.

Randall Rothenberg, chief executive at Interactive Advertising Bureau remarked, “We are in one of the most difficult economic slumps in decades. Interactive is one of the advertising sectors that have been least affected. In recent years, the digital revolution has driven a transformation of how consumers experience advertising and media. As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives.”

With the economy mired in the worst recession since World War II, online advertising accounted for 47% of all marketing mediums throughout the U.S. That comes in just above 2008’s 44% during the first six months of the year.

An emerging category for online advertising is now video ads, in which spending surged more than 38%. Nevertheless, spending on display ads on Web pages retreated 1.1% to around $3.8 billion. Although distress and doubt has entered into the online advertising arena, specialists are confident those revenues, as well as spending, will return to form as the U.S. economy recovers.

The Internet was not the only advertising instrument that has been affected by the economy. In fact, newspaper ads have plunged nearly 30% during the 2^nd quarter alone. Furthermore, both television and radio broadcasters have seen a steep decline in lost ad revenues, although not as severe as newspapers, but still a double-digit decline.

Recently, consumer advocates and online marketers are preparing to make a stand against online regarding advertisement governing standards that may be instituted to protect individuals. Marketers tailor their ads to follow particular browsing habits, which are most often tracked and data is collected most times without prior notice or permission from the individual browsing the Internet.

During the next several weeks, the U.S. Congress is set to place their hand within the matter by submitting a bill to the House of Representative that would obligate each and every Website to explain irrevocably exactly how they intend on using the information gathered, while allowing the individual using the site to opt out of providing any personal information.

These ads thus become the topic of discussion. Are these tailored ads some sort of surveillance or a form of customer service? Every time a person on the Internet clicks on a Web page, “cookies” are created. These bits of code embedded in the page are then analyzed by marketers that interpret them and determine how to target their ads.

In an estimate from eMarketer Inc., a company established solely for market research and trend analysis on Internet, e-business, online marketing, media and emerging technologies, targeted ads account for $1.1 billion, or 4.5%, of the combined $24.5 billion projected to be spent on online advertising in 2009. In 2007, the figure for targeted ads within online advertising stood at only $500 million.

On October 5, the Federal Trade Commission (FTC) ruled that consumers writing their own personal reviews of online products or services, must disclose in a “clear and conspicuous” manner any compensation they may have received for writing these reviews. They need to state the specific method of imbursement, whether it be monetarily, with gifts or other provided services.

Effective December 1, 2009, the FTC ruling will reprimand any violators with upwards of $11,000 in fines for each infraction and could potential affect celebrity endorsements of products that were made under false pretences.

Dan Olds, an analyst with the Gabriel Consulting Group, commented on the FTC’s rule, “This new policy could have big impact on the bloggers and review sites that post glowing reviews without disclosing that they have been paid to have that opinion or have received free products in exchange for their praise. … I think that forcing them to disclose in their reviews the compensation they received for that review is important and will provide greater consumer protection.”

Reaching as far back as the 1960s, the Internet was spawned when the U.S., through research projects in conjunction with several military agencies, was contracted to institute a fail-safe and robust computer network. The research, with the help of the National Science Foundation, ignited global involvement in the creation of new networking technologies, which ultimately led to the commercialization of a worldwide network in the mid 1990s,

Today, the Internet provides nearly a quarter of the Earth’s population the freedom to chat online, share and transfer files, play gamed, conduct commerce, engage in social networking, publish materials, watch videos on demand, teleconference and telecommute via the services provided by the Internet.

With people using the Internet for a variety of needs, companies place advertisements on Web pages and search engines to entice sales and product identification. During the first six months of 2009, U.S. companies generated nearly $11 billion in online ad revenues, despite spending 5% less than they had in the same time frame last year.

The 5% decline in spending broke a string of 24 consecutive quarters in which spending increased, dating back to the 1^st quarter of 2003. If spending continues to decline throughout the remainder of the year, it would mark the first time since 2002 that spending posted an annual decrease. From 2006 through 2008, spending increased 35%, 26%, and 11% respectively.

However, the $11 billion in sales did come in 5.3% lower than the first half of 2008. The more than 5% loss represents a total loss in revenues of more than $610 million. Even with the seemingly substantial loss in ad revenues generated, it pales in comparison to the overall advertising industry’s decline, which fell 15.4%.

Randall Rothenberg, chief executive at Interactive Advertising Bureau remarked, “We are in one of the most difficult economic slumps in decades. Interactive is one of the advertising sectors that have been least affected. In recent years, the digital revolution has driven a transformation of how consumers experience advertising and media. As the economy improves, we’re confident that brands will devote an even greater share of their budgets to reaching consumers as they make interactive media a larger part of their lives.”

With the economy mired in the worst recession since World War II, online advertising accounted for 47% of all marketing mediums throughout the U.S. That comes in just above 2008’s 44% during the first six months of the year.

An emerging category for online advertising is now video ads, in which spending surged more than 38%. Nevertheless, spending on display ads on Web pages retreated 1.1% to around $3.8 billion. Although distress and doubt has entered into the online advertising arena, specialists are confident those revenues, as well as spending, will return to form as the U.S. economy recovers.

The Internet was not the only advertising instrument that has been affected by the economy. In fact, newspaper ads have plunged nearly 30% during the 2^nd quarter alone. Furthermore, both television and radio broadcasters have seen a steep decline in lost ad revenues, although not as severe as newspapers, but still a double-digit decline.

Recently, consumer advocates and online marketers are preparing to make a stand against online regarding advertisement governing standards that may be instituted to protect individuals. Marketers tailor their ads to follow particular browsing habits, which are most often tracked and data is collected most times without prior notice or permission from the individual browsing the Internet.

During the next several weeks, the U.S. Congress is set to place their hand within the matter by submitting a bill to the House of Representative that would obligate each and every Website to explain irrevocably exactly how they intend on using the information gathered, while allowing the individual using the site to opt out of providing any personal information.

These ads thus become the topic of discussion. Are these tailored ads some sort of surveillance or a form of customer service? Every time a person on the Internet clicks on a Web page, “cookies” are created. These bits of code embedded in the page are then analyzed by marketers that interpret them and determine how to target their ads.

In an estimate from eMarketer Inc., a company established solely for market research and trend analysis on Internet, e-business, online marketing, media and emerging technologies, targeted ads account for $1.1 billion, or 4.5%, of the combined $24.5 billion projected to be spent on online advertising in 2009. In 2007, the figure for targeted ads within online advertising stood at only $500 million.

On October 5, the Federal Trade Commission (FTC) ruled that consumers writing their own personal reviews of online products or services, must disclose in a “clear and conspicuous” manner any compensation they may have received for writing these reviews. They need to state the specific method of imbursement, whether it be monetarily, with gifts or other provided services.

Effective December 1, 2009, the FTC ruling will reprimand any violators with upwards of $11,000 in fines for each infraction and could potential affect celebrity endorsements of products that were made under false pretences.

Dan Olds, an analyst with the Gabriel Consulting Group, commented on the FTC’s rule, “This new policy could have big impact on the bloggers and review sites that post glowing reviews without disclosing that they have been paid to have that opinion or have received free products in exchange for their praise. … I think that forcing them to disclose in their reviews the compensation they received for that review is important and will provide greater consumer protection.”

In a report from the Organization for Economic Cooperation and Development (OECD), the jobless rate throughout the 30 richest countries is expected to reach an all-time high near 10% during the second half of 2009. If these numbers are reached, that will indicate that more than 57 million workers are slated to make up the unemployment ranks.

Of the 57 million workers projected to be out of work, nearly half, or 25 million, are predicted to lose their jobs over a three-year period. The world’s current unemployment rate already sits at a post-World War II high of 8.5%.

Representatives from the OECD commented on their findings, “This unwelcome phenomenon occurred in a number of OECD countries in past recessions when unemployment remained at a new higher plateau compared with the pre-crisis level even after output returned to potential, and it took many years, if ever, to bring it down again to the pre-crisis level.”

Economists believe that the global economy will rebound marginally in 2010, although the short-term employment outlook looks bleak. Throughout the industrialized countries in the report, there were a broad range of unemployment rates.

In a June survey, the OECD reported that the unemployment rate within the Netherlands was as low as 3.3%, while Spain’s rate soared to a record high 18.1%. The European Union as a whole posted an overall unemployment rate of 8.9%. The U.S.’s rate was 9.5% in June.

The OECD later commented, “There is great uncertainty looking forward, but labor market conditions appear set to deteriorate further in the coming months. The labor market outlook would be even worse if governments had not pursued expansionary monetary and fiscal policy.”

Since the start of the global crisis, estimated to have started in the 3Q of 2007, the recession is responsible for more than 8.7 million U.S. workers losing their jobs. Stretching from the end of 2007 to the end of 2010, OECD officials believe that the recession will be liable for nearly 1.24 million workers in Japan losing their jobs.

According to the OECD predictions, the unemployment debacle seems to have neared a bottom in the U.S., Spain and Ireland. From the start of 2007 through the second quarter of 2009, the unemployment rates within these countries have advanced by 4.5 percentage points, 9.7 percentage points and 7.8 percentage points respectively.

Nevertheless, other countries such as Italy, Germany and France appear to have additional employment troubles laying ahead.

In order to help combat these projections, the OECD is urging countries to implement government policies that would entail spending more funds on active labor market initiatives. These programs would include job-seeker support, training and labor-demand support that help the out-of-work seeker find employment.

At the same time, the governments of these countries need to take calculated steps in order to successfully target the short-term problems. If precautions are not heeded, the unproductive practice of supporting declining businesses, as well as not allowing expanding ones to hire new workers, could prolong the unemployment crisis.