Business Digest: Jobs Growth, California Town Bankruptcy

By November 11, 2013 Blog, Business Digest No Comments

Strong Jobs Growth: In October, total nonfarm payroll employment rose by 204,000 and the
unemployment rate was little changed at 7.3 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in leisure and hospitality, retail trade, professional and technical services, manufacturing, and health care. Despite beating consensus estimates of an increase of 120,000, the number of unemployed, 11.3 million people, changed little in October.

Solid GDP Growth: Real gross domestic product increased at an annual rate of 2.8 percent in the third quarter of 2013, solidly beating the consensus estimates of a 2 percent increase. Real GDP is the output of goods and services produced by labor and property located in the United States and the increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), private inventory investment, exports, residential fixed investment, nonresidential fixed investment, and state and local government spending that were partly offset by a negative contribution from federal government spending.

Twitter Soars in IPO: There has been huge demand for Twitter stock its stock price is currently at $43 up $17 in a few days from its IPO price of $26. Major hedge funds are reported to have requested millions of shares pre-IPO only to receive a few thousand shares due to overwhelming demand. Twitter has a valuation of around $25B and is currently not profitable.

Desert Hot Springs Bankruptcy: The resort town of Desert Hot Springs, California, is projected to run out of cash by March 31. If it files for bankruptcy, it will follow in the paths of two fellow Californian cities Stockton and San Bernadino, which have also filed for bankruptcy. At the center of its decision to potentially file for bankruptcy is its annual projected revenue of $13.9 million, $2.7 million less than budgeted. This sudden unexpected drop in revenue has led the City Council to consider declaring a fiscal emergency at its next meeting, a prerequisite under state law for a Chapter 9 bankruptcy filing.

By George Liu, Columbia College, Class of 2017