8.5.09

Economists React: Jobs Report Is ‘Less Bad’

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Economists React: Jobs Report Is ‘Less Bad’

Economists and others weigh in on the smaller-than-expected decline in U.S. payrolls and the increase in the unemployment rate.

  • We remain cautious on the employment front, as job losses typically continue for 3-6 months after the trough of economic output. That suggests a peak in joblessness towards the end of the fourth quarter 2009, a peak which would cap off two full years of consistent monthly payroll declines… There’s some hope at the end of the rainbow, but the economy will keep busy hunting down the leprechaun for a few more months before we get there. –Guy LeBas, Janney Montgomery Scott
  • Many are interpreting the April employment report as yet another sign that the economy is “stabilizing,” but the more accurate interpretation of these signs is that the economy’s pace of contraction is slowing, which is not quite the same as stability and s still a long way from the economy actually improving. –Richard F. Moody, Forward Capital
  • This is less bad than the 690,000 average in February and March, and both manufacturing and service losses slowed, but it is hardly a triumph or even a stabilization. It is terrible, as is the rise in the unemployment rate to 8.9% from 8.5%. Soaring unemployment is depressing wage gains… There’s much further to go here; seriously bad news because without wage gains people can’t deleverage unless they cut spending deeply. –Ian Shepherdson, High Frequency Economics
  • The details of the report were somewhat less encouraging than the headline number would suggest. The losses were equally split between the services producing and goods-producing sectors. The key catalyst for the improvement during the month was public sector hiring, as government payrolls added 72,000 jobs due to 2010 Census hiring… Taken together, this was a very strong report as it suggests that the pace of deterioration in the U.S. labor market may be easing. Notwithstanding, it is clearly evident that labor market conditions remain very dismal, and the growing difficulty of displaced workers in finding new jobs will continue to place further upward pressure on the unemployment rate, which is now at its highest level in over 25 years. –Millan L. B. Mulraine, TD Securities
  • The report is consistent with the notion that the pace of deterioration is slowing but we are still a long way from the point of stability in both the labor market and the broader economy. About 500,000 individuals will eventually be hired for a short period of time to conduct the 2010 Census. Most of these workers will show up in the payroll tally next spring and disappear by the late-summer or fall. However, because of controversy surrounding the accuracy of past census efforts, the government has implemented a special program to confirm residential addresses ahead of time. This resulted in 63,000 federal government hires in April and indications are that another 80,000 or so are likely to be hired for this task over the next few months. There is no indication of how long these workers will be needed. In any case, this is an important distortion that should be excluded from the payroll tally. Thus, the census-adjusted payroll result for April was -602,000. –David Greenlaw, Morgan Stanley
  • Federal government employment was boosted by 66,000 due to hiring related to the decennial census to be conducted in 2010. Because this gain is unlikely to be repeated in subsequent months, the headline nonfarm payroll figure offers a misleading indication of the new trend in employment. We still believe the U.S. labor market is at an inflection point, but today’s employment report suggests the improvement may prove more gradual than we had hoped. –Nomura Global Economics
  • Taking into account the downward revisions to the prior months and the sharp increase in government employment, this is a weaker-than-expected report… Relating this report to the bank stress tests, the unemployment rate in April is already at the “alternative more adverse” average level assumed for the 2009 (and the rise in the insured unemployment rate since the April employment survey week suggests that if surveyed at the end of the month, the unemployment rate would probably be 9% or higher). –RDQ Economics
  • Sectoral shifts in the job market are becoming evident as private sector job gains are limited to secular growth areas such as education & healthcare while actual job gains are centered in the federal government. –John Silvia, Wachovia Economics Group
  • Given that the overall rate of decline in economic output is moderating from the 6% plus plunges recorded in the fourth quarter of 2008 and first quarter of 2009, it is natural for nonfarm payrolls (which are a coincident economic indicator) to also start to drop at a lesser pace than seen during the truly horrific November-March span. We thus expect the reported private sector job declines to diminish in coming months. With that said, we still seem to be some time from stabilization in employment conditions, and even further from sustained growth in payrolls. –Joshua Shapiro, MFR Inc.
  • The massive hemorrhaging in the job market over the past four months has slowed and the worst is behind us. Job losses in most sectors slowed… Thanks to the economic stimulus program including innovative monetary policy, the economy could hit the bottom sometime around mid-year. The financial market has begun to stabilize and the credit flows throughout the economy are slowly improving… Even if the economy continues to show signs of improvement, businesses will cut jobs and trim fats to stay lean and mean in the immediate future. Employers want to make sure a sustained economic recovery is here before hiring. That time won’t come until sometime in 2010. –Sung Won Sohn, Smith School of Business and Economics

Compiled by Phil Izzo

3.5.09

10 Things Your Pharmacist Won't Tell You

10 Things Your Pharmacist Won't Tell You
Wednesday, April 29, 2009
Copyrighted, SmartMoney.com. All Rights Reserved.
1. “I’m overworked and stressed out . . .”

It seems that doctors are prescribing a lot more medication than they used to. In 2007 pharmacists filled 3.8 billion prescriptions, up from 3.3 billion in 2002. Michael Negrete, CEO of the Pharmacy Foundation of California, says that some physicians may actually be prescribing drugs unnecessarily, say for the flu. “It’s easier and quicker than explaining to a patient why they don’t need an antibiotic,” Negrete says.
The upshot is that your pharmacist is probably working harder than she should be—Paul Lofholm, owner of two pharmacies in Marin County, Calif., says his pharmacists fill prescriptions at a rate of 80 to 100 per shift. “Pharmacists are stressed out,” says Frederick Mayer, a veteran pharmacist and president and CEO of the Pharmacists Planning Service in California, “and it’s getting worse.” One side effect is that most pharmacists don’t have the time to offer the counseling federal and state law require with each prescription. It’s not just a formality—a pharmacist’s recommendation for how and when to take a certain medication can go a long way, for example, in helping to decrease some of the adverse side effects of medication.

2. “. . . .which means I’m more error-prone.”

At first it was a bit of a mystery: When Daniel Hawkins of Danville, Calif., took the penicillin he was prescribed, he became violently ill. But days later it was discovered that he had mistakenly been given Zoloft, an antidepressant. It may sound like an isolated incident, but it happens all the time. In California alone, there were 433 complaints of prescription error filed with the state Pharmacy Board in 2007. Those inside the pharmacy industry blame such mix-ups on long hours, tough working conditions, and a shortage of qualified personnel.
Another big factor: the increasingly rapid pace of the work. “Things get so busy,” Mayer says, “that I have no time to look at the computer screen, or even to look inside the bottle and make sure that the pills I’m giving out are the right ones.” Pharmacists are also being asked to spend more time on administrative chores these days, especially those involved with insurance. “Add to that the small things—such as insurance companies only approving 30-day dosages at a time, causing more face time with each patient in the pharmacy, which only adds more to the administrative hassle,” says Lofholm. “It’s a spiraling effect, which means more distractions open up more room for error.”

3. “I don’t understand all my merchandise.”

With so many people taking an interest in alternative medicine these days, most pharmacies sell profitable herbal remedies right at the prescription counter. This setup encourages customers to make impulsive herbal purchases while picking up their prescriptions.
But many pharmacists are woefully uninformed about the complications that can develop when various drugs get taken in tandem. Even if your druggist sees you purchasing, say, the memory enhancer ginkgo biloba as you pick up a prescription for the blood thinner Coumadin, studies have shown that he may fail to recognize that the two taken together increase your risk of internal bleeding and stroke. “It is a problem,” says Varro E. Tyler, former professor emeritus at the Pharmacy School of Purdue University. “Herbs get sold in this country as dietary supplements and foods, but they are drugs. And all drugs have interactions.”
“Don’t buy dietary supplements, period,” says Larry Sasich, chair of the department of pharmacy practice at the LECOM School of Pharmacy in Erie, Pa. “They’re not regulated, so you have no idea if what you’re seeing on the label is really what is in the bottle.”

4. “My drug-swapping could make you sick.”

Pharmacists will sometimes switch up a patient’s medication from one manufacturer’s make to another without ever asking permission. And most of the time, it’s fine. But there are times when this practice can be dangerous, particularly in the case of epilepsy patients and some people on thyroid or heart medication. “Most people can use any manufacturer’s version of a product without problems, but there’s a small but significant number of people that cannot,” says Sandy Finucane, vice president of legal and government affairs for the Maryland-based Epilepsy Foundation. “Unfortunately, we don’t know who those people are until after they’ve experienced the side effects.”
Many epilepsy patients in particular have spent years trying to find the right drug and the right dosage to control their seizures, Finucane says, and a drug from an unfamiliar manufacturer can lead to unexpected side effects including seizures, blurred or double vision, or severe headaches. “Because the consequences of having a seizure are so dramatic, we want to do everything we can to avoid this,” Finucane says. Her suggestion: All epilepsy patients should inform their pharmacist of their condition and ask to have their records indicate that switching from one manufacturer to another is prohibited. “And if any questions come up, tell the pharmacist to call your doctor directly,” she says.

5. “Frankly, your private records aren’t all that private.”

While the Health Insurance Portability and Accountability Act (HIPAA), first enacted by Congress in 1996, has helped to better protect patients’ privacy over the years by ushering in a host of confidentiality laws, there are still some ways that information about your health and medication history can get disseminated without your knowledge. For example, drug companies are still paying pharmacists to access customers’ personal information for consumer marketing so that they can send out refill reminders or information about a new drug brand to patients.
But as the medical profession goes digital—with doctors’ sending prescriptions electronically to pharmacists and the use of information exchange networks, which allow doctors, pharmacists, and even nursing homes to access patients’ electronic medical records—industry experts are worried that HIPAA may have some troubling loopholes. “The HIPAA privacy rule was written at a time when we weren’t aggressively moving towards a networked health-care system, so we have to review that law and strengthen that law to protect consumer privacy,” says Leslie Harris, president of the Washington, D.C.–based Center for Democracy and Technology. “If too many people have access to that database, you’ve got a big problem.”
If you’re concerned, ask your physician or pharmacist up front what their privacy policies are and exactly who will have access to your medical records, says Christine Bechtel, vice president of eHealth Initiative, a nonprofit organization in Washington, D.C. Only those who are authorized and authenticated should be able to look at your records, she says.

6. “I can be pretty sneaky sometimes.”

It’s certainly not true of all pharmacists, but some have been known to resort to underhanded tricks in order to beef up their profit margins. Jim Sheehan, an associate U.S. attorney based in Philadelphia, experienced this firsthand when he was on vacation in Florida and came down with strep throat. A local pharmacist there inspected Sheehan’s prescription for antibiotics from a nearby urgent-care center and offered the following choice: Pay cash for the medicine and get it immediately, or run it through Sheehan’s insurance company and wait half an hour since he was from out of state. Sheehan, who specializes in prosecuting health-care fraud cases, had heard of this scam before. “The pharmacist figured that I had no idea of the retail price, and he would have charged me whatever he wanted,” he says. Sheehan opted to wait, and lo and behold, the process of checking with the insurance company took only a few minutes.
Other tricks he’s come across are equally dodgy. Sheehan says he’s seen pharmacists who buy deeply discounted drug samplesfrom doctors then turn around and sell them at retail prices. He also has encountered unethical druggists who will charge a customer her insurance plan’s $10 copayment even if the retail price for the drug is less than that.

7. “Paying out-of-pocket? The price of your prescription just went up.”

The pharmacy business should be all about uniformity. Go from drugstore to drugstore, and your prescription should have the same name, dosage, and instructions for use. But that’s not always the case when it comes to the cost of medication: A recent comparison of pharmacies found little consistency in the price of prescriptions. Why? There are differences in the cost of doing business— rents vary, as do other fixed expenses.
But there’s another factor at work, explains Larry Sasich: “The pharmacist has to figure out his break-even point.” Among the variables is the percentage of prescriptions filled that are covered by insurance. In pharmacies with a lot of covered customers, the break-even cost is shifted heavily to patients who are paying full price—generally, the elderly on Medicare or the working poor. “Pharmacists can’t push around a big HMO,” says Sasich, “but they can push around a little old lady.”

8. “This medication is stale.”

Most people don’t think that underworld crime figures can come between them and their Celebrex. Well, they haven’t heard of Anthony “Tony Ripe” Civella. In 1991 Civella was convicted of buying $1 million worth of discounted drugs that were supposed to go to nursing homes— where large quantities of medication are purchased at bulk prices and used quickly—but instead found their way to retail pharmacies (at a tidy profit for Tony Ripe). The problem is called “drug diversion.” In a typical case, crooked druggists buy diverted medication at reduced prices and in quantities far bigger than they’re legally allowed to handle; by the time the last of the shipment reaches consumers, the pills are long out of date.
The big losers in all this are consumers who end up with stale medication that hasn’t been properly stored, explains a spokesperson for the U.S. attorney’s office in Kansas City, Mo. There’s also a secondary price, since in the long run such practices raise the cost to the consumer. “Somewhere the drug manufacturers and wholesalers have to recoup their losses from having discounted drugs going to retail pharmacists,” the spokesperson says.

9. “I don’t just sell drugs. I make them.”

Say your five-year-old needs a medication that comes only in pill form. If you think he’ll do better with a liquid, you can ask your pharmacist to make the conversion himself—right there at the store. It’s called “compounding”—a traditional practice in which pharmacies combine, mix, or alter ingredients to create unique medications that meet specific needs of a patient—and when done right, it’s perfectly safe. But some pharmacists compound drugs that already exist—such as injectable morphine or hormonereplacement- therapy meds, for example— because it’s cheaper. “They do that so they can make more money,” says Larry Sasich. “Only the dangers get passed on, none of the savings.”
The bottom line: If the product is available commercially, you’re better off getting it that way. “Pharmacists don’t [compound] under good manufacturing guidelines; they do it in the back of their shops,” says Sasich, advising that “if you can buy the FDA product, you should.”

10. “You can get any prescription you like online.”

Go on the Internet to buy medicine, and you’ll probably save some time and money. But be careful. While there are many legitimate websites that sell prescriptions, such as RxSolutions. com, there are also countless dubious operations in cyberspace, which tend to specialize in “lifestyle drugs” like Viagra and Propecia. In lieu of requiring a doctor’s prescription, these rogue sites offer e-physicals in which you answer questions to determine whether or not you should be taking the medication in question. Not only is this illegal, it’s dangerous. “Viagra can kill a man with a heart condition,” says Mark Herr, former director of the New Jersey Division of Consumer Affairs. “You should not be buying Viagra online if you do not have a doctor prescribing it.”

When purchasing prescription medication online, look for an insignia bearing the initials VIPPS—which stand for Verified Internet Pharmacy Practice Sites—to find reputable sellers.

Copyrighted, SmartMoney.com. All Rights Reserved.

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