Jobless Rate Hits 7.2%, a 16-Year High

By LOUIS UCHITELLE
Published: January 9, 2009

The nation lost 524,000 jobs in December, reflecting a pervasive fear among employers that if they fail to shed workers quickly their companies may go under in a recession poised to become the worst since the 1930s.

The unemployment rate, meanwhile, jumped to a 16-year-high of 7.2 percent, the Bureau of Labor Statistics reported on Friday. The growing army of the unemployed, at 11.1 million, is nearly 50 percent bigger than at the start of the recession a year ago.

Responding to the report, President-elect Barack Obama said Congress must enact an economic stimulus plan quickly.

The December decline in jobs came on top of similar losses in October and November. Not since 1980 has the work force shrunk so much in just three months. Companies across all industries are grappling with sales that are deteriorating rapidly just as they lose easy access to loans.

“The simplest way for a company to hoard cash is to drain their inventories and fire their workers,” said Robert J. Barbera, chief economist at the Investment Technology Group, a research and trading firm, “and everywhere you look, that is what is happening.”

The total number of jobs lost in the recession now totals 2.59 million, counting upward revisions for October and November, with many more job losses expected in coming months.

Nearly as troubling, hundreds of thousands more people sought full-time work in December but could not get more than part-time jobs.

If those workers are included, the so-called total unemployment rate swelled to 13.5 percent, from 12.6 percent in November and just 8.7 percent at the start of the recession. Total unemployment includes the officially unemployed, the part-timers who seek more hours and the nearly 300,000 who would like a job but tell pollsters from the Bureau of Labor Statistics that they are too discouraged to look.

Employers in nearly every industry cut payrolls. Only health care and education bucked the trend in December, adding just 45,000 jobs combined, the Bureau of Labor Statistics reported. Manufacturers, construction companies and retailers led all last year in eliminating jobs, and they did so again in December.

“What happened to jobs in the fourth quarter tells us unmistakably that this recession is going to be a long one and a deep one,” Mr. Barbera said. “The toughest six months,” he added, “will be the just-completed fourth quarter and the first quarter of this year.”

The consensus view of economists surveyed by Blue Chip Economic Indicators is that the economy will continue to contract until July at the very least, but at a slowing pace in the second quarter. That would make it the longest recession since the 1930s, outlasting the two record-holders, the mid-1970s and early 1980s downturns. Each of these recessions lasted 16 months. The current recession, which started in December 2007, would reach that milestone in April.

At a news conference in Washington, Mr. Obama said that behind the latest job statistics were “real lives, real suffering, real fears,” and Congress must bring Americans relief by quickly enacting a stimulus plan. Asked whether he was worried that some lawmakers thought his proposed stimulus program, estimated at $775 billion, was too small, he responded that others thought it was too big and said he was open to a “whole host of ideas” in consultation with Congress.

“You are assuming that I expected it to be easy,” he told one questioner. “No.”

The latest jobs report suggested that many employers tried to cut back hours before resorting to job cuts or hiring freezes. The average number of hours that Americans worked fell to 33.3 a week in December, down two-tenths of an hour, to the lowest level since records first were kept in 1964. Over the course of the recession, average weekly hours worked are down 4 percent.

“There has been a change in psychology as the financial crisis has devolved into a panic,” said Mark Zandi, chief economist at Moody’s Economy.com. “Businesses have gone from trying to hold onto workers, by reducing their hours, to laying them off in an effort to survive.”

Economists fell over themselves in describing the dire nature of the jobs report, which they said was alarming confirmation that the economy was in the midst of a sharp contraction in which consumer spending and business investment bordered on free fall. Many say that the economy contracted in the fourth quarter at a 5 or 6 percent annual rate and that steep contraction will continue at least through the first quarter, letting up only if Congress approves a sizable stimulus, one that kicks in soon and is at least as big as the $775 billion that the Obama camp has proposed.

“It will add massively to the budget deficit,” said Stuart G. Hoffman, chief economist at the PNC Financial Services Group in Pittsburgh, who counts himself as an advocate of balanced budgets. “But I am not against running deficits in these circumstances, not with so many people losing their jobs.”

Mr. Hoffman expects the unemployment rate, which jumped to 7.2 percent last month from 6.8 percent in November, to rise to 8.5 percent by July and plateau there for the rest of the year.

Others are less sanguine. They see 9 or 10 percent unemployment by early next year, and a jobless recovery that continues for about six months even after the economy ceases to contract.

By comparison, the unemployment rate reached 10.8 percent in the 1981-1982 recession, its highest level since World War II. In those years, unemployment and economic growth rose and fell more or less in tandem. But in the early 1990s that changed. In the 1990-1991 recession and again after the 2001 recession, employers continued to shed jobs for months. In the case of the 2001 recession, employment did not return to its prerecession level for four years.

“Even with the help of a stimulus,” said David A. Levy, chairman of the Jerome Levy Forecasting Center, “the unemployment rate is going to keep rising for the rest of the year, or longer.”


Jeff Zeleny contributed reporting.


From The New York Times

For Arab Clan, Days of Agony in a Cross-Fire

Palestinians set down the bodies of two members of the Samouni family during a funeral in Gaza City on Monday

By TAGHREED EL-KHODARY and ISABEL KERSHNER
Published: January 9, 2009

GAZA — Israel’s attack has razed buildings and upended families in much of crowded Gaza. But few neighborhoods suffered more than Zeitoun, a district of eastern Gaza City. And few families felt the wrath of the Israeli military more than the Samounis.

Israeli troops swarmed Zeitoun shortly after the ground invasion of Gaza began a week ago, and members of the extended Samouni family said they were moved from house to house as soldiers took over the neighborhood. On Monday, with nearly 100 Samounis huddled together in one house, the shooting and the shelling began, according to accounts of family members and witnesses that were partly corroborated by the Red Cross and the United Nations.

Thirty Samounis died, not all of them quickly. Ahmed al-Samouni, 16, survived.

“I could feel the blood dripping inside my head,” Ahmed said, recalling the days he lay wounded in the bombed-out building. “My father was crawling — he couldn’t move his legs,” he said. His cousin Abdallah, 10, was trying to stand up but kept falling down; his brother Yaqoub, 12, kept removing large pieces of shrapnel from his own stomach; and his sister Amal, 9, was not moving at all. Another brother, Ishaq, 12, was wounded in the legs. He bled for two days before he died.

Ahmed, speaking from his hospital bed, said he wanted to call for help. But his mother, Laila, was among the dead, and her cellphone was nowhere to be found.

The story of the Samouni family has horrified many since Red Cross officials on Wednesday publicized their discovery of four emaciated Samouni children trapped for days in a home with the corpses of their mothers. The Red Cross said the Israeli military denied its paramedics access to the area for several days after the ground invasion began on Jan. 3, part of the offensive against Hamas that Israel says is intended to stop the firing of rockets into southern Israel.

Israeli officials said they were still looking into the Zeitoun episode. A military spokeswoman, Maj. Avital Leibovich, said Monday that the army had “no intention of harming civilians.” Hamas, which governs Gaza, “cynically uses” civilians for cover by operating in their midst, she said.

But some international aid officials are arguing that the plight of civilians in Zeitoun, as well as the shelling of a United Nations school where civilians had sought refuge, should be investigated as war crimes.

“Accountability must be ensured for violations of international law,” Navi Pillay, the United Nations high commissioner for human rights, said in an address in Geneva to a special session of the Human Rights Council focused on Gaza. The council has a reputation for censoring Israel. Ms. Pillay is a respected South African judge who recently assumed the top United Nations human rights job, which is separate from the council.

Ms. Pillay said, “Violations of international humanitarian law may constitute war crime, for which individual criminal responsibility may be invoked.” She suggested that the council weigh dispatching a mission to assess violations committed by both sides.

The Israeli military has not said whether the strike on the house in Zeitoun was intentional or a mistake. In the case of the United Nations school, Israel has said that Hamas militants were firing mortars from a location near the school.

According to Ahmed and other witnesses interviewed at the hospital, soldiers came to several of the Samouni homes that make up a section of Zeitoun soon after the ground invasion started. They told family members to vacate their homes and to gather together in one home down the street. Ahmed said they were moved a second time as well, until nearly 100 of his relatives crowded into one house.

Soldiers searched and occupied the now-empty houses. The Zeitoun neighborhood is strategically located and is known to have many supporters of Hamas. Ahmed said the Israelis wanted to turn it into “a military camp.”

Samouni family members did not deny that Hamas militants operated in the area. A family member said there was no active Hamas resistance in the immediate vicinity, although militants were firing rockets at Israel a little more than a mile away.

At about 6 a.m. on Monday morning, Ahmed said, tanks started demolishing a wall of the house where the extended clan was sheltered. His father moved toward the door, presumably to warn the soldiers that civilians were inside, but the troops started shooting, he said.

The shooting then stopped, and the soldiers appeared to withdraw. But a short time later, three rockets and several shells hit the building and tore apart the rooms where his family was gathered.

Ahmed said he and his brother Yaqoub pulled blankets over their relatives and managed to shut the doors in an attempt to hide from the tanks and soldiers outside. Everyone was crying, he recalled, and he did not immediately realize the scope of the damage.

Some relatives, like Masouda Samouni, 20, Ahmed’s sister-in-law, managed to crawl out by themselves and arrived at the hospital that same day. A few hours after the attack on Monday, she recounted how she had lost her mother-in-law, her husband and her 10-month-old son.

At that time, witnesses and hospital officials believed that 11 members of the extended family were killed and 26 wounded, with five children age 4 and under among the dead. The first survivors who arrived at the hospital may not have been aware of the full extent of the disaster and apparently had not counted all those left behind.

Ahmed, rescued nearly three days later, named 27 relatives who died in the building where he was hiding; the Red Cross said three more corpses were found in a house nearby.

The survivors ate tomatoes, drank water and cooked noodles over a fire, but tried to avoid attracting the attention of soldiers in the area. Relatives who escaped repeatedly asked the Red Cross to send help, but Red Cross officials said their requests to respond to the emergency were rejected by the Israelis during the initial days of the siege.

It was 3:30 p.m. on Wednesday when help finally came, half an hour before the end of a three-hour pause in the fighting ordered that day by Israel to allow humanitarian aid and rescue workers to enter Gaza.

Antoine Grand, the head of Red Cross operations in the Gaza Strip, said in a telephone interview on Thursday that the first rescue team on Wednesday had to leave the dead and take out only the wounded, “horrible as that seems,” because they had only limited time and only four ambulances.

“We had no other choice,” Mr. Grand said.

He added that the ambulances had to stop on one side of an earth mound put up by the military. The team had to walk a mile to the houses and bring back the wounded in a donkey cart.

On Thursday, they went back to the same area and brought out another 103 survivors, three of them wounded.

A report issued by the United Nations Office for Humanitarian Affairs on Thursday, based on telephone interviews with several members of the Samouni family, largely corroborated Ahmed’s version of events, saying about 30 people were killed when the house was shelled repeatedly. The report said the attack on the Samouni home was one of the “gravest incidents” in the Israeli campaign.

In another statement issued on Friday, the humanitarian affairs office emphasized that its report was not intended to render a legal verdict on the attack.

In a rare public statement on Thursday, the Geneva-based International Committee of the Red Cross said it believed that in this instance, the Israeli military failed to meet its obligation under international humanitarian law to care for and evacuate the wounded. The delay in permitting entry to rescue services was “unacceptable,” it said.

The rescue team found “four small children next to their dead mothers in one of the houses,” the Red Cross said. “They were too weak to stand up on their own.”

The Red Cross added that Israeli soldiers were posted at a military position some 80 yards away from the house, and there were several other army positions and two Israeli tanks nearby.

Mark Regev, a spokesman for the Israeli government, said Friday that it was important that “we have better channels of communication and coordination” with the Red Cross and other aid groups. He said Israel had an interest in the Red Cross’s “successfully carrying out its mission.”

The Rebirth of Phuket

The infinity pool bar at the Anantara Phuket, which tries to create the feel of the traditional water villages of southern Thailand

By GREGORY DICUM
Published: January 11, 2009

I wasn’t far out from the beach — just beyond the lightly rolling breakers. My feet had left the sandy bottom, and amniotic water burbled around my shoulders. A sea eagle sailed between me and the hot afternoon sun. The starburst tops of a coconut grove delineated the beach. An arc of sugar, it stretched away to a cluster of rounded rocks and, beyond, a rise of greenery leading into the tufted mountains of a national park.

I was floating in the Andaman Sea at Khao Lak, in Thailand’s southwest. A paradise of mangroves, tropical islands and emerald coves set in electric-blue waters, the Andaman Coast is one of the world’s best-known beach destinations. It includes the island province of Phuket, the spectacular small island Ko Phi Phi, hopping Rai Le Beach and more sedate Khao Lak. Its vacation options range from some of the most luxe accommodations on the planet, through unassuming hotels priced for the modest budgets of middle-class European and Asian families, to pristine natural areas accessible only to those willing to rough it. The area is legendary for its lush coral reefs and caves and the green-shrouded sugar-loaf rocks rising from the sea in Phang Nga Bay.

But the softly humid breezes of the Andaman Coast also carry an echo of menace. At the end of 2004, this beach at Khao Lak was littered with bodies and debris. Horrific, indelible scenes that spread around the world almost as fast as what had caused them, the great tsunami. All told, the disaster killed a quarter-million people worldwide and more than 8,000 in Thailand — fishermen, villagers and more than 2,000 foreigners from 16 countries. The United Nations estimated that around 150,000 people in Thailand lost their livelihoods in fishing and tourism that December morning.

I visited this part of Thailand in October, just before the start of the tourist season, with an eye toward assessing the coast’s recovery. What I found was a placid seaside with few signs of the disaster. Instead, it had the expectant atmosphere that any popular tourist area has just before the high season. The beach at Khao Lak was empty, and few tourists were around, but the palm-shaded resorts were spotless and occupied with preseason preparations. Everywhere I went on the Andaman Coast I heard the rhythm of industrious hammers and smelled fresh paint.

Statistics from the Tourism Authority of Thailand support the impression of a full physical recovery for the tourist business — and until political uncertainty and the current global economic crisis sent visitor numbers plunging, an economic recovery as well. Other than Khao Lak and Ko Phi Phi, which, respectively, lost 75 and 60 percent of their hotels, most of the Andaman Coast was spared complete devastation. Hotels were refurbished and repaired, and after visitors returned in large numbers in 2006, a vigorous building boom began. In 2007 alone, Phuket’s stock of hotel rooms climbed a tenth, contributing to an 11 percent increase in visitors to the island, to more than five million — more than in any year before the tsunami. In 2008, more new hotels went up. For travelers willing and able to spend the money to get there, this coast is once again an inviting place to stay.

The Khao Lak area, which suffered much of the Andaman Coast’s worst devastation, now features a low-key set of immaculate resorts attracting families from around the world, especially Northern Europe. Instead of boisterous night life like that in Patong, on Phuket to the south, or stunning cliff faces like Rai Le’s, to the east, Khao Lak’s charm is in its long serene beach at the foot of a range of thickly forested mountains.

Though it retains its mellow vibe, the new hotels are changing things: Khao Lak now features more upscale luxury than it had before, with newer resorts joining rebuilt ones like Le Méridien Khao Lak, which seems to have overcome rumors that it was haunted after the disaster. I found few signs of the tsunami — a vacant lot here and there and a few trees’ exposed roots and stumps of twisted branches alarmingly high up their trunks. The town, a strip of shops, restaurants and tour operators’ offices in utilitarian concrete boxes, was bustling if uninspiring.

As the sun dipped magnificently into the fiery Andaman Sea, I took a place at a split bamboo table by the surf. I dug my toes into the warm sand like a ghost crab and washed down an assertively seasoned green curry with a big bottle of hoppy Chang Beer. Just as the sky turned inky, someone nearby launched a candle-powered paper hot-air balloon. It rose steadily, eventually taking its place as an orange star among the constellations.

THE next day, behind the town, I found unmistakable evidence of the tsunami. A small grassy park surrounds an incongruous police boat that was washed there, a mile from the sea, by the wave. The boat had been guarding a Thai prince who was killed in the disaster, and it became a place of mourning and remembrance.

Certainly, everyone who survived has vivid memories. My driver in Phuket, Marn, told me that 10 members of his family had died in the tsunami. But the forlorn boat, and an abstract memorial sculpture nearby, seemed forgotten. A few foreigners walked around the gray hulk in a warm drizzle, shaking their heads.

If there is any grand physical monument to the disaster, it is the rebuilt coast itself.

“It’s back, stronger than it ever was pre-tsunami,” said Bill Heineke, an owner of the Anantara hotel group, which got its start in northern Thailand and now has nine resorts around Asia. Anantara’s hotel in Khao Lak was destroyed by the tsunami, but in October the group opened a new one on Phuket.

But the area’s economy is at the mercy of more than the awesome forces of nature. Even as I strolled the beach, fresh troubles were brewing. The global economic collapse has been a blow to every region that depends on the disposable incomes of rich countries. Meanwhile, domestic tensions have flared as Thailand’s complex politics works through a particularly intransigent period. Political demonstrations in November closed both of Bangkok’s airports for days, stranding more than a third of a million travelers.

In an indication of how important tourism is to the region, the government of Phuket provided generous aid to stranded visitors (just as many visitors had heroically helped out in the aftermath of the tsunami). Even after the Bangkok airports had reopened, Nick Davies, managing editor at The Phuket Gazette, said, arrivals at Phuket were down by half. By December, in an echo of worldwide troubles, a group of tour operators appealed to the governor of Phuket for debt relief.

Yet the sea remains lambent and calm, and the air touches one’s cheek like a kiss. From the porch of my little bungalow at the Baan Krating hotel in Khao Lak, where leafy palms and umbrella trees clung to the cliff beneath me, towering above the egg-like rocks bathed in clear water below, there was no sign of trouble whatsoever.

With business on the Andaman Coast suffering because of the worldwide slump, taking a beach vacation is actually the best way for foreigners to help. And they should find little reason for fear: political crisis in Thailand almost never has an impact on visitors, and tensions have lessened, making repeat airport closures unlikely.

In fact, now is a great time to go to the Andaman Coast. In normal years, the beaches can be overrun, crowded with as many snorkelers as fish, or by sunburned, jabbering tourists jockeying for position to shoot a scene as it appeared in “The Man With the Golden Gun” or “The Beach,” which were both partly filmed there. But with visitation way off (skittish Asian package tourists are staying away in droves, although Northern Europeans seem unfazed), normally crowded beaches will have noticeable elbow room — even sometimes the solitude that is the often imagined, little realized ideal of a tropical beach vacation.

And bargains are easy to find. Luxury beachside villas at top resorts can be had at the last minute online for hundreds of dollars off their usual published rates. While I was there, I found an oceanfront villa at the two-year-old Ramada Resort in Khao Lak for under $150 a night — nearly three-quarters off the standard rate.

At the high end, the new hotels are competing to push luxury to new levels, — combining global style with Thai hospitality and tropical luxury — with private villas overlooking pristine beaches, pampering by attentive staff, deeply relaxing Thai massage, top quality international food and a sense of splendid respite from the woes of the world. The Yamu, a new high-end hotel scheduled to open late this year in Phang Nga Bay, promises luxuries including a chocolate room; interiors by Philippe Starck and the luxury hotel designer Jean-Michel Gathy; and, for traveling musicians who like to mix work with pleasure, a recording studio.

One of the most prominent new resorts, the Anantara Phuket, opened in October on Mai Khao Beach at the north end of Phuket, a world away from the Jet Skis and beach umbrellas of Kata Beach to the south. (Jet Skis are banned on Mai Khao to protect nesting turtles.)

The resort is laid out along an artificial lake, mimicking a traditional southern Thai water village. Soaring wooden roofs peak above the enclosed compounds of the villas, each of which includes its own small swimming pool and outdoor and indoor sitting areas complete with big daybeds for savoring Thai massages. A dark teak roof and staircase arcing around a banyan tree set off the smoothly polished Treetop bar, with swooping terrazzo, fiber-optic chandelier curtains that sway in the benevolent sea breeze and soft settees for contemplating the setting sun with a ginger margarita in hand.

The rooms themselves are exquisitely well-considered, with big sliding glass doors opening the bedrooms directly onto the shimmering pools, and with big bathtubs sunk directly into the water, separated by a glass partition.

In this cocooned paradise, the misfortunes of the world did intrude slightly: the day after riot police confronted demonstrators in Bangkok, the Bangkok Post’s headline screamed “Brink of Anarchy!”

Perhaps. But that was the only sign of it.

From The New York Times