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North Carolina’s statewide unemployment picture improved in the month of April, as the state’s seasonally adjusted unemployment rate fell to 9.4 percent from March’s 9.7 percent, a .3 percent improvement.

According to data released Friday, May 18, by the North Carolina Department of Commerce’s Labor and Economic Analysis Division, the number of unemployed across the state fell to 439,368, a decrease of 12,686. Over-the-year numbers also show improvement from a 10.4 percent unemployment rate in April 2011.

“Since January of 2010, our rate has dropped by two full percentage points and employers have added more than 100,000 jobs,” said N.C. Department of Commerce Deputy Secretary Dale Carroll. “Putting North Carolinians back to work remains our priority. Our employment services are located throughout North Carolina to provide numerous programs and job search assistance.”

The state’s labor force also contracted between March and April, as 11,215 NC residents, or .2 percent, left the state’s labor force. Year-over-year numbers however, show an additional 21,026 workers added to the state’s labor force.

The number of employed across the state increased to 4,229,753 workers, an increase of 1,471 between March and April. Since April 2011, 63,513 jobs have been added in North Carolina.

Total non-farm industry employment decreased by 1,300 jobs in April, falling to 3,958,100, though the state added 30,300 non-farm jobs between April 2011-April 2012. 84 percent of those jobs came from the private sector, 25,500. Private sector employment declined over the month by 1,200.

Professional and business services led the way with 3,600 jobs added over-the-month, while the state’s construction, financial activities, leisure and hospitality, and mining and logging sector each added 100 jobs over-the-month.

The state’s largest over-the-month job loss came in the manufacturing sector which lost 2,900 positions. The information sector lost 1,100 jobs, other services lost 900, Trade, Transportation, and Utilities 800 jobs, and government lost 100 jobs.

Of the state’s major industries, the professional and business services category showed the largest over-the-year increase, adding 9,300 jobs. Education and Health Services added 8,400 positions, and Trade, Transportation, and Utilities added 6,700, and Government at 4,800.

Average Weekly Hours for manufacturing production workers in April decreased by 12 minutes from March’s revised 41.3 hours per week. Average Hourly Earnings decreased by $.04 to $16.57, while Average Weekly Earnings declined by $.494 to $676.92.

Regular Initial Claims for Unemployment Insurance totaled 49,961 in April, increasing 1,349 from March. Forty-four percent of Initial Claims from April 2012 were “attached” to a payroll, meaning that employees expect to be recalled to their jobs.

A total of $116,464,653 in regular unemployment benefits was paid in April to 110,720 claimants statewide, a decrease of 6,987 since March 2012. For the 12 month period ending April 2012, $3,457,721,116 was paid from all programs, both state and federal.

The state’s unemployment rate decrease lags behind the national average of 8.1 percent. National figures indicate the number of unemployed across the country declined by 173,000 between March and April, though the civilian labor force declined by 342,000 positions, or .2 percent, which may indicate the improvement in the unemployment rate nationally could be a sign that the long-term unemployed may be leaving the labor force.

The U6 unemployment rate, a measure tracked by the United State Department of Labor’s Bureau of Labor Statistics, which tracks the country’s total number of unemployed, was 14.5 percent in April, unchanged from March 2012. Year-over-year numbers show improvement from April 2011’s 15.9 percent, or a 1.4 percent improvement.

The U6 rate allows the BLS to track the total number of unemployed across the country, and includes, “all persons marginally attached to the labor force, plus total employed part time for economic reasons.”

Persons, “marginally attached,” to the labor force, according to the BLS, include those, “who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months.” The U6 rate also includes discouraged workers who, “have given a job-market related reason for not currently looking for work,” and those who are employed part time who want and are available for full-time work but have had to settle for a part-time schedule.

The NC Department of Commerce will release Ashe County’s unemployment date on Friday, May 25.

Gold rose more than 1 per cent on Friday, on track for its largest two-day gain since October, boosted by investors’ consolidation of positions ahead of the weekend and a stronger euro.

The second day of gains helped bolster confidence, which had been shaken by gold’s fall earlier this week to a four-month low at $US1527 an ounce, near critical long-term support levels.

But traders remained cautious given how the escalating crisis in Europe has driven the single currency lower this month.

“There is still no conviction in the market. If gold was a safe haven, it should be higher. Physical demand is mediocre and the Europeans want the US dollar, which is why it is so strong,” a physical US gold trader said.

The psychologically important $US1600-per-ounce mark remained elusive.

It got close, hitting an intraday high of $US1597.4 an ounce in late morning, before meeting technical resistance and easing back to around $US1590.

Spot gold was up 1 per cent at $US1588.96 an ounce in late trade, while US gold futures for June delivery settled 1.08 per cent higher at $US1591.9.

That takes gold up 0.6 per cent on the week, snapping two weeks of losses, and brings it back to positive territory year-to-date, with a 1.5-per cent rise.

While it was a far cry from the 14-per cent gain in February when prices came close to $US1800 an ounce, bullion outpaced the US equity market after Facebook’s much-anticipated debut stumbled after a delayed opening.

Trading on Friday returned to familiar trends, tracking the euro, which recovered from four-month lows against the dollar, though concerns over a Greek euro exit and instability in the Spanish banking system weakened confidence.

“To see a return of gold reacting positively to macro stresses is indeed refreshing, but it is still far too early to make any firm conclusions from here that gold has indeed turned the corner,” UBS said in a note. “Momentum will be key, and follow-through buying will have to kick in to encourage investors to jump in.”

Holdings of gold-backed exchange-traded funds tracked by Reuters, which issue securities backed by physical metal, edged up 76,000 ounces on Thursday, but remained under the 70-million-ounce level they slipped below a week ago.

Among other precious metals, silver gained 2.18 per cent at $US28.64 an ounce.

The gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, touched 56.6 this week, its highest since late December, easing back on Friday to around 56 as silver outperformed gold in a rising market.

Spot platinum was up 0.53 per cent at $US1452.75 an ounce, while spot palladium put on 0.54 per cent at $US601.22 an ounce. Both metals underperformed surging gold prices, with the gold:platinum ratio rising to a 3-1/2-month high at 1.09.

As chiefly industrial metals used in autocatalysts, platinum and palladium are more exposed than gold to the economic cycle, and have suffered from a lack of car demand in recent years. Industry players gathered in London for Platinum Week this week were pessimistic that prices would recover soon.

In a rare positive story for the metal, a senior official of Hong Kong-based jeweller Luk Fook said China’s platinum jewellery market, the world’s largest, has great potential for growth as rising wealth fuels luxury product demand.

Reuters

As early as 2010, the senior banker who has been blamed for the debacle, Ina Drew, began to lose her grip on the bank’s chief investment office, according to current and former traders. She had guided the bank through some of the most rugged moments of the 2008 financial crisis, earning the trust of Jamie Dimon, JPMorgan’s chief executive, in the process.

But after contracting Lyme disease in 2010, she was frequently out of the office for a critical period, when her unit was making riskier bets, and her absences allowed long-simmering internal divisions and clashing egos to come to the fore, the traders said.

The morning conference calls Ms. Drew had presided over devolved into shouting matches between her deputies in New York and London, the traders said. That discord in 2010 and 2011 contributed to the chief investment office’s losing trades in 2012, the current and former bankers said.

“The strife distracted everyone because no one could push back,” said one current trader in the office who insisted on anonymity because of the nature of the issue. “I think everything spiraled because of the personality issues.”

Mr. Dimon has described the trades as “sloppy” and “stupid,” but has not identified the specific mistakes. The trading loss, initially estimated at $2 billion but now said to equal at least $3 billion, is the most embarrassing misstep of Mr. Dimon’s seven-year tenure, and it has also strengthened the hand of regulators in Washington who are in the final stages of writing rules that could reshape the banking industry. In his radio address on Saturday, President Obama urged tighter restrictions on banks’ trading activity.

JPMorgan and Ms. Drew declined to comment. Mr. Dimon is due to make a presentation Monday at an investor conference in Manhattan sponsored by Deutsche Bank. While JPMorgan’s stock has suffered since the disclosure of the loss, the bank’s overall health remains strong, and the company is expected to post a significant profit in the second quarter.

Ms. Drew, 55, resigned as chief investment officer last week. In 2011, she earned roughly $14 million, making her the bank’s fourth-highest-paid officer.

But when the losses were mounting in recent weeks, Ms. Drew’s command of the chief investment office was far different from what it had been during her stellar performance of 2008, according to interviews with more than a dozen current and former traders, bankers and executives at JPMorgan Chase. All insisted on anonymity because the losses were being examined by a host of regulators, as well as the Federal Bureau of Investigation.

In the midst of the financial crisis, for example, Ms. Drew attended the regular morning huddle with traders and forced them to defend positions and outline the risks they would face during the approaching trading day.

“I always thought she was coolheaded and an excellent manager,” said Petros Sabatacakis, a former senior executive at Citigroup who worked with Ms. Drew at Chemical Bank.

Senior executives at JPMorgan said that her success in 2008, even as other banks were sustaining crippling losses, helped forge a sense of implicit trust between Ms. Drew and Mr. Dimon, one reason that he believed her initial assurances last month that the trades were not seriously troubling.

Ms. Drew also enjoyed the confidence of her subordinates, according to former employees. Part of her skill, they said, was her steely resolve. One former trader recalled that Ms. Drew counseled a credit trader who had a large bet in bank-preferred securities, which began to lose money during 2009. Instead of folding, Ms. Drew supported the trader who wanted to hold on, ultimately generating $1 billion in profits.

Ms. Drew’s success during the market crisis in 2008 also left the chief investment office feeling much more confident — too confident, in the eyes of some former employees there.

“When Ina was there, things ran smoothly,” one former trader there said.

But Ms. Drew’s firm hand began to weaken after she contracted Lyme disease. Her absences opened the door for tensions among her deputies to flare into the open. “Look,” one current trader added, “it is a tough place to work.”

After all the hype and anticipation, Facebook’s initial public offering turned out to be a disappointment that may bode poorly for investors in the company’s richly priced shares.

Facebook (ticker: FB) sold 421 million shares Thursday at $38 after bumping up the price range from the original $28 to $35 per share. The stock began trading above $42 Friday morning and came under pressure in the afternoon, spending much of the final half hour just above $38 before finishing at $38.23. (The stock traded as high as $44 in the private market in March.) Without reported support from the deal underwriters, the shares might have fallen below $38 in what would have been a big embarrassment for Facebook and Wall Street.

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Courtesy of NASDAQ/Zef Nikolla

Zuckerberg kicks off trading.

The big question is whether the underwriters will continue to support the stock this week. (More on Facebook’s debut with small investors, at barrons.com.)

Many figured that Facebook would trade at $45 or higher given that the deal was said to be hugely oversubscribed. Yet “oversubscribed” deals aren’t always winners. Many institutional investors seek allocations of supposedly hot IPOs because they want to make money, not because they want to own the stocks. Access to hot IPOs is one way Wall Street rewards profitable clients. If the deals don’t trade well initially, institutions often sell quickly to lock in whatever profits they can. That might have been the case Friday as Facebook trading volume was heavy at 574 million shares—21.4% of the Nasdaq composite’s total volume.

It may turn out that Facebook ends up fizzling like General Motors (GM), which went public in a highly touted IPO in November 2010 at $33 and now trades at $21. The lack of a big “pop” in Facebook prompted a sell-off Friday in social-networking stocks like Zynga (ZNGA), Groupon (GRPN), and LinkedIn (LNKD) and contributed to an afternoon decline in the major averages.

Barron’s has been skeptical on Facebook, including an article last week (“Mad About Facebook!“). The shares still look overpriced based on profits and sales, especially given the company’s challenges in generating revenue from mobile users and doubts about the effectiveness of brand advertising on Facebook, which were highlighted by General Motors’ decision to stop using the site for such ads. Then there is slowing revenue growth, with first-quarter sales dropping below fourth-quarter levels.

“It’s exceedingly dangerous to pay a $100 billion valuation for a company that hasn’t figured out a way to make money,” says Aswath Damodaran, a professor at Stern Business School at New York University who has written critically online about the company and its corporate governance. He contrasts Facebook with Google (GOOG), which has a clear model based on online-search advertising. “Facebook doesn’t have an impossible valuation, but the odds don’t seem in its favor now,” Damodaran says.

Here’s what one veteran tech investor had to say Friday: “Like most IPOs in tech land, Facebook is geared toward enriching early investors and employees while sticking public investors with shares burdened with poor voting rights and high growth expectations.”

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At $38, Facebook trades for 76 times projected 2012 profits of 50 cents a share and 89 times 2011 earnings. Online-search powerhouse Google looks like a much better value, trading at $600, or 14 times estimated 2012 profits.

As we wrote last week, Facebook shares probably discount a tripling in annual revenue, to $15 billion, in three years. It might have to reach $35 billion in revenue to produce a double in its shares. At $15 billion in sales, Facebook could earn $1.50 per share, assuming 40%-plus margins; at $30 billion in revenue, profits could total $3 per share.

The IPO amounts to a huge score for CEO Mark Zuckerberg, who seemed to get everything he wanted: a $100-plus billion market value, a personal net worth of nearly $20 billion and complete control. Early investors were eager sellers, accounting for 57% of the deal.

Investors, beware. There could be an enormous amount of stock for sale between now and year-end, when capital-gains taxes may rise, because lock-up restrictions on 1.8 billion shares expire between August and November. Existing holders paid an average of just $1 per share. Heavy sales could pressure the stock.

“Facebook is brazen about the fact that they don’t see any need for input from stockholders. In effect, they want my money but don’t want me to have any say in how the company is run,” Damodaran wrote earlier his year. It’s one thing to give such control to Warren Buffett, who has earned it over nearly 50 years at the helm of Berkshire Hathaway. It’s another to give unlimited power to a 28-year-old who has built an impressive business with over 900 million users worldwide, but hasn’t demonstrated yet the skills to run and profitably expand a major public company. 

E-mail:
editors@barrons.com

As soon as General Motors said this week that it would quit paid ads on Facebook, Ford was on Twitter saying it has doubled-down on social and digital media — and hinted in a tweet that GM just didn’t know how to use new social media.

Earlier in Drive On:  After dissing new media Facebook ads as not worth it, GM drops out of old media Super Bowl ads, too

Then, no sooner had GM said yesterday it would not buy ads in the next Super Bowl, and Super Bowl regular Hyundai quickly let us know it won’t pass on the biggest annual ad event in TV — and by the way, (are your ears burning GM?), did know that the game is a huge social media event, too.

In an e-mail, Steve Shannon, Hyundai’s marketing VP, said: “The Super Bowl is a perfect venue for a brand like Hyundai. We are extremely pleased to be an advertiser on the 2013 Super Bowl.

“In addition to the fact that this is far and away the best-watched television program in the U.S. the social media opportunities continue to grow every year and we expect even more impact from this aspect of our advertising on the Super Bowl next year.”

The irony is not lost on us that GM global ad chief Joel Ewanick, when he was Hyundai’s ad guru, got the company into the Super Bowl and famously used it to roll out the job loss guarantee plan that helped Hyundai grow sales even through the depths of the financial crisis.

A pair of Hyundai ads during game action this year are above and below.