Trammell Crow buys Los Angeles River development site

Developer Trammell Crow Co. has agreed to buy a once-controversial site along the Los Angeles River near downtown Los Angeles with the intention of turning it into a manufacturing center for technology businesses.

Trammell Crow said it would pay $15.4 million to the Los Angeles Community Redevelopment Agency for 20 acres of land at Santa Fe Avenue and Washington Boulevard. The deal is contingent on a decision from the state Supreme Court expected by January on budget legislation that sharply limited the agency’s functions.

The Cleantech Manufacturing Center project would create 300,000 square feet of industrial and office space to house about 200 workers and would be the southern anchor of a planned technology corridor along the river, said David Bloom of the CRA.

The top 30 feet of soil at the site has been cleared of contaminants left by generations of industrial use involving train maintenance and bus manufacturing, said Brad Cox, a senior managing director at Trammell Crow. Work could begin by the end of 2012 while further pollution abatement continued, he said.

“There are just not a lot of large parcels available in the downtown-adjacent area, and this is a chance for us to deliver a state-of-the-art product to attract clean-tech tenants,” Cox said.

Earlier plans to reuse the site decades ago included a prison and a toxic waste incinerator, but neighborhood opposition thwarted those proposals.

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-- Roger Vincent

Photo: Redevelopment official Cecilia Estalano, left, and city planner Claire J. Bowin look over the clean technology corridor plan on the Los Angeles River in 2009. Credit: Lawrence K. Ho / Los Angeles Times

Commercial property prices stay flat in October

 

Commercial real estate values have risen substantially since the trough of 2009 but remained flat in October, an industry analyst said.

Properties such as office buildings, warehouses, apartment complexes and malls have increased in value by more than 45% from the bottom of the market in 2009, according to Newport Beach-based Green Street Advisors Inc. That means that three-quarters of the decline in values that occurred as the market went down between 2007 and 2009 has been erased.

Prices are back to where they were in late 2006, about 10% below their all-time highs.

“After enjoying a robust two-year recovery, property prices have effectively gone into a stall over the last six months,” said Mike Kirby, director of research at Green Street. “Some of the factors that have been fueling the impressive recovery in values have taken a turn for the worse, including the economic outlook and capital availability.”

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Construction spending and manufacturing growing — slightly

30-year mortgage rate drops to 4%, Freddie Mac says

-- Roger Vincent

Photo:  Commercial buildings in Kansas City. Credit: Kansas City Convention & Visitors Assn.

Groupon IPO: Did investors get a deal or a dud?

Some relevant numbers in the wake of daily-deals purveyor Groupon Inc.’s initial public stock offering, which began trading on Friday:

--- Deal size: The Chicago company sold 35 million shares at $20 each, raising $700 million. It was the largest IPO for a U.S. Internet-related firm since Google Inc. raised $1.66 billion in August 2004.

But some foreign Net-related companies have raised more than Groupon recently. Russian search engine Yandex raised $1.3 billion in its IPO in May.

--- First-day pop: Groupon stock finished its first day of trading at $26.11, for a gain of nearly 31%. It traded as high as $31.14 shortly after the session opened as buyers rushed in. They should have waited: Within an hour of the peak price the stock fell as low as $25.90.

The first-day price gain was relatively modest compared with some other Net-related IPOs this year. LinkedIn surged 109% on its first day, Zillow jumped 79% and Yandex rose 55%. But another way to look at those gains is that the companies’ underwriters priced the shares too low in the IPOs.

--- Flippers: Did a lot of the buyers in the Groupon IPO immediately flip the stock? Looks that way: 49.8 million shares traded for the day on Nasdaq, or 142% of the shares offered. Of course, some shares undoubtedly changed hands multiple times during the session.

--- Market value: The company ended the day with a market value of $16.65 billion. That’s the value of the 35 million shares that were sold and the 600 million shares that are still in the hands of insiders and other early Groupon investors.

At $16.65 billion, three-year-old Groupon is worth more than a lot of established companies across the business spectrum, including semiconductor-equipment maker Applied Materials ($16.4 billion), grocer Whole Foods Market ($12.2 billion) and retailer Nordstrom ($10.7 billion).

Groupon is far smaller than Internet titans such as Google ($193 billion), Amazon.com ($98.4 billion) and EBay ($42.2 billion). But it has more than twice the valuation of LinkedIn ($7.9 billion) and about 14 times the valuation of online job-search firm Monster Worldwide ($1.2 billion).

--- Revenue and losses: Groupon’s quarterly sales have rocketed from just $4 million in the third quarter of 2009 to $420 million in the quarter just ended. But as investors hopefully know, Groupon still hasn’t turned a profit. (Read the company's prospectus here.)

In the first nine months of this year the company lost $215 million, or about 34 cents a share, on revenue of $1.1 billion. Groupon has to spend a lot to market itself to the merchants who use its daily-deals service. Marketing costs alone were $613 million in the first nine months.

--- When will profits come? As Karl Denninger writes on SeekingAlpha, that will depend on whether merchants keep coming back to Groupon. And the only way they’ll keep coming back is if their Groupon customers come back to pay full price rather than the deep-discount price.

Remember: The Net-based daily-deals idea that Groupon has popularized is a young concept. The revenue so far is huge, but that won’t help Groupon's stock if investors see little hope of achieving and sustaining strong profitability.

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-- Tom Petruno

twitter.com/tpetruno

Photo: Groupon Chief Executive Andrew Mason (wearing the blue tie) jokes around with Groupon's largest shareholder and chairman, Eric Lefkofsky, outside the Nasdaq Market in New York, where the company's stock began trading on Friday. Credit: Brendan McDermid / Reuters

Early Economic Projections Could Haunt Obama

Friday’s tepid jobs report brings a fresh reminder of the stubborn difficulty President Obama faces in living up to the expectations raised by his economic team just before he took office, Richard W. Stevenson writes on The Caucus.

More on Calculating Poverty

Poverty researchers have been debating alternatives to the traditional poverty rate for years. So it’s not surprising that some people wondered why we chose the particular method that we used for today’s article about poverty.

Under guidelines established by National Academy of Sciences, the Census Bureau publishes eight alternative methods of calculating poverty. They are broadly similar. All take a fuller accounting of economic well-being than the official poverty measure does. They include benefits the official measure ignores, like food stamps and tax credits. And they subtract taxes, work expenses and out-of-pocket medical costs, which the official measure does not.

They differ in part by the way they account for inflation, with four using the Consumer Price Index and four using the Consumer Expenditure Survey.

One of the questions we wanted to ask was whether an alternative measure — by including many billions in increased safety-net spending — gave a different view from the official count of how much poverty has risen since prerecession days.

That question cannot be answered with the measures in the Consumer Expenditure Survey because of a change in its methodology in 2007, contaminating comparisons with earlier years. Therefore, under guidance from the Census Bureau, we chose the Consumer Price Index measure that most closely approximates a new alternative the bureau will release on Monday — the Supplemental Poverty Measure.

Our analysis of that measure showed the number of poor people had risen by 4.6 million people since 2006 — not by 9.7 million people as the official Census count reported in September.

Shawn Fremstad of the Center for Economic and Policy Research notes that the Supplemental Poverty Measure, being released on Monday, uses the Consumer Expenditure Survey and therefore differs from the method we used. That is true. But the Consumer Expenditure Survey measures cannot be used for prerecession comparisons. We used the next best thing — a measure that, like the measure coming Monday, includes a fuller account of income and expenses and adjusts for differences in costs of living.

It’s worth noting that since the methodological change occurred, both sets of alternative measures show poverty rising more modestly than the official measure does. From 2007 to 2010, poverty rose 2.6 percentage points by official count; 0.8 points on average by the four Consumer Expenditure Survey measures, and 0.9 points by the four Consumer Price Index measures. That bolsters our finding that alternative measures show poverty rising less than the official numbers suggest. It’s also worth noting that our findings echo those by researchers in Wisconsin and New York City, who also found safety net programs doing more than the official numbers show to restrain poverty growth.

By official count, there are 46.2 million Americans in poverty. Many experts think the Supplemental Poverty Measure may produce a slightly higher count, as our article noted. That is a different question from whether safety net programs have done more than the official count shows in restraining its growth.

McRib pork provider Smithfield accused of abusing pigs

McDonald’s McRib pork sandwich -– made from miserable pigs?

A week after consumers began cheering (or gagging) over the reintroduction of the cult classic, the Humane Society is accusing McDonald’s pork provider Smithfield Foods Inc. of mistreating its hogs.

In a complaint filed with the Securities and Exchange Commission this week, the animal rights group said the meat producer subjects its pigs to cruel living conditions.

The Humane Society says that Smithfield is misleading its consumers and investors through online videos called “Taking the Mystery out of Pork Production.” The clips claim, in part, that the animals are raised in “the best possible environment," with the best care that can be made available to them.

But the animal advocacy group pointed to its undercover investigation last year, which found Smithfield sows crowded into movement-prohibiting gestation crates, many coated in blood. 

In a statement, Smithfield said that the “allegations are wholly without merit and appear to be another in a series of frivolous attacks,” adding that 30% of its sows will be in group housing by the end of the year.

The company added that the well-being of its animals was one of its “highest priorities,” leading it to seek counsel from experts such as animal welfare consultant Temple Grandin.

As for the limited-time McRib, the blogosphere has been busy dissecting its contents. According to Time magazine's Healthland blog, the sandwich includes ingredients such as azodicarbonamide, “a flour-bleaching agent that is most commonly used in the manufacture of foamed plastics like in gym mats and the soles of shoes.”

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-- Tiffany Hsu

Photo credit: McDonald's

Groupon shares rise 31% in first day of trading

The initial public offering of daily-deals site Groupon Inc. was a good deal for some of its investors.

Groupon shares jumped in their eagerly awaited stock-market debut Friday, rising almost 31% from their IPO price. But the stock closed below the $28 level at which trading opened and the $31.14 high of the day.

That meant big profits for professional investors who were lucky enough to get in early, but immediate losses of as much as 16% for many smaller investors who bought in during much of the day.

“It’s successful for the insiders, including the investment bankers, the company and the flippers” who sold at a quick profit, said Francis Gaskins of IPOdesktop.com in Marina del Rey. “The outsiders will probably get burned.”

Nevertheless, Groupon’s offering is likely to be viewed as success overall, thus setting the stage for a host of other offerings in coming months, including those expected from social-media behemoths Zynga Inc. and Facebook Inc.

“It’s really an astonishing first-day opening considering all the criticism it’s endured over the past couple of months,” said Lee Simmons, an IPO researcher at Dun & Bradstreet. “This signals that there’s really pent-up demand for these types of stocks.”

The stock, which was priced Thursday night at $20, closed at $26.11. Groupon raised $700 million in the offering, which valued the company at $12.7 billion. The stock trades on the Nasdaq Stock Market under the ticker symbol “GRPN.”

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-- Walter Hamilton

Photo: The entrance to Groupon's headquarters in Chicago. Credit: Tim Boyle/Bloomberg

America ignores long-term unemployment at its peril

It wasn’t great, good or, depending on whether your glass is always half full or empty, even that encouraging. But there was nothing in the latest US jobs report that has had anyone borrowing the doom-laden language that Europe has had a recent monopoly on.

80,000 jobs were created in October, and the tally for August and September was revised upwards by a total of 102,000. According to the Bureau of Labor, people have been hired at a rate of 125,000 a month for the last year. There was a decline, too, in the long-term unemployed – a group you belong to in the US if you’ve been without work for more than six months. That figure fell 366,000 to 5.9m.

But don’t expect Americans to be celebrating. That’s not only because October’s figures don’t immediately change an extremely difficult jobs market. 13.9m people are still unemployed and a further 8.9m are having to settle for part-time work. It runs deeper.

The high level of unemployment America has had since the financial crisis is a wound to its self-esteem. This is a country that built itself on being able to offer work to those who can’t find it where they’re from. And if they do have it, there's always been the promise of better paid and more interesting work on offer in the US.

I was talking to a businessman this week who had built a company that now employs more than 20,000 people. The mention of the unemployment rate prompted an almost physical reaction in him as if a bad smell had entered the room. And nowhere is the assault on the US psyche stronger than in the scale of long-term unemployed this downturn has created.

A report published this week by the Pew Trust, a bipartisan research group, underlines what a new problem it is. Before spiking to its current level of 42.2pc of the total number of unemployed, the highest it reached since the 1960s was just under 15pc following the recession of the early 1980s.

In its analysis of long-term unemployment in the third quarter of this year – July to September – The Pew Trust report found that older workers were hit particularly hard. 43pc of those without work over the age of 55 had been for more than six months. A university degree did not offer that much protection – 34pc of the unemployed with a degree were long-term casualties, while almost every industry had 20pc long-term unemployment.

Because it’s a new phenomenon, it’s bringing new headaches for America’s policymakers.

The safety net for those who can’t get work was strengthened in 2009, when the period people can claim unemployment benefits for was extended from 26 weeks to up to 99 weeks. That has come at a cost. The Congressional Budget Office estimates that $160bn was spent on unemployment benefits in 2010 compared with $33bn in 2007. The 99 week extension is due to expire in January, and despite the fierce political debate the issue provokes, it would be a surprise if Congress does not extend it for 2012.

The far more testing issue is how to unwind the problem. America has barely started. The state of Georgia has pioneered a programme in which the long-term unemployed continue to receive benefits while working at a company for a while in the hope that they will be hired on a permanent basis. Though it’s had mixed results, President Barack Obama is pushing for a nationwide variation as part of his $447bn American Jobs Act.

Meanwhile, Federal Reserve chairman Ben Bernanke has consistently voiced his anxiety about the problem. But much of the central bank’s ammunition has been fired and there’s a limited amount that monetary policy can do on its own to address the long-term unemployed. Although October’s figures recorded a decline in their numbers, the danger and greater risk is that the problem deepens.

The consensus among economists is that the majority of unemployment is what they describe as cyclical. In other words, as the economy recovers companies will hire more aggressively and those without work will find it. But at an otherwise dull press conference on Wednesday, Bernanke remarked that: “cyclical unemployment left untreated can, so to speak, become structural.”

The implication is worrying: a period out of work can turn a previously employable worker into one that will find it much harder to get a job. Skills atrophy, confidence plummets and the needs of companies

move on.

Precisely because long-term unemployment is such an affront to America’s self-image, it’s one that the country surely needs to put more energy into understanding and trying to solve.

More big bank customers jumping to credit unions, reports say

Even as big banks begin to back off proposed fees, disgruntled consumers may be jumping ship to credit unions, according to new reports this week.

The Credit Union National Assn. said that at least 650,000 customers have opened new accounts at credit unions this month –- more than the 600,000 total who joined in 2010. That equates to $4.5 billion in new savings accounts over about four weeks.

The trade group attributed much of the growth to customer flight from institutions such as Bank of America Corp., which announced a new $5 debit-card fee in late September only to claw back the plan this week after heavy consumer backlash.

A poll Thursday from research firm Harris Interactive found that Bank of America customers are more likely to abandon the company than patrons of other banks and credit unions.

Nine percent of consumers using Bank of America said they were “not at all likely” to continue, compared with 6% of Wells Fargo & Co. users, 3% of JPMorgan Chase & Co. users and 2% of credit union users.

Fifteen percent of Bank of America customers said they don’t feel valued by the bank, compared with just 0.5% of credit union customers. Three quarters of credit union users said they had a “trustworthy relationship” with their institution, compared with a quarter of Bank of America customers.

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Photo: Tim Boyle / Getty Images

Italy is neither insolvent nor illiquid

Italy's debt problems are not crippling

Regular readers of mine will know that, whilst I have long regarded Greece as certain to default and very likely to leave the euro, I have been very sceptical about the idea that there is any significant problem with Italy.

Recent days have seen a spiking up in Italian bond yields and a rise in the spread over German bunds.  Many commentators are now suggesting or implying that we are approaching the point at which a liquidity crisis for Italy might turn into a solvency crisis.

I find this an extraordinary claim, greatly at variance with the data and historic experience.  If it is in any sense true, that can only be for the most brutish of political reasons.

As I write, Italian ten-year bond yields are hovering at around 6.4 per cent, a euro-era high.  But why should we imagine, in any way, that that implied Italy had a solvency problem (or even a liquidity problem).  Consider the chart:

Here we see that recent bond yields do indeed constitute euro-era highs.  But before the euro, Italy had far higher yields and did not default.  If it did not default then, why would it default now?  Perhaps you think it used the period of low interest rates to accumulate extra debt?  Not so.  Current Italian debt-to-GDP is around 120 per cent of GDP, about the same as it was in the early 1990s.  And it isn’t accumulating additional debt especially fast – even during the recession itself, whilst deficits elsewhere rocketed into double figures, Italy's peaked at 5.4 percent in 2009 (less than, for example, France's 7.5 per cent).

So if even if Italy were simply to pay current market rates on its debts, it would be paying lower interest rates on no more debt than it serviced in the 1990s without defaulting. (Indeed, a recent Bank of Italy stress test suggested that debts would be sustainable even at 8%.) Why would it default this time?

Maybe you think that before the euro, Italy inflated away its debts?  Consider the following graph:

It is true that Italian inflation was higher in the early 1990s than today.  Then it was around 4 per cent, now it’s around 3 per cent.  Is that 1 per cent difference really the difference between defaulting and not – especially given that today’s interest rates are still 2-6 per cent below those in the 1990s?

Well, maybe real GDP grew faster then than it will now?  Maybe, maybe not.  In the seven years from 1992 to 1998, Italian GDP grew at 1.3 per cent per year in real terms — hardly stunning, but it didn’t default.

Finally, perhaps we worry that the capacity of the Italian population to deal with increased taxes to service Italy’s debts is less than in the past?  But by 2007, Italian household debt was only 30 per cent of GDP (versus around 60 per cent in Germany, nearly 70 per cent in the UK, and around 80 per cent in Ireland, Spain and Portugal). Whilst the UK, Ireland, Belgium and the Netherlands all have banking sectors of 350-450 per cent of GDP, the Italian banking sector is one of the smallest, relative to GDP, in the eurozone, at only around 150 per cent of GDP (only around the same size as Finland's).

I see nothing in any of these numbers to indicate that Italy would find any more interest in defaulting on its debts now than it did 20 years ago.  Of course, were the euro to disintegrate for other reasons – if, say, Germany left – then there is a fair chance that Italy’s post-euro currency would depreciate versus the post-euro German currency.  And if everyone else were then defaulting, perhaps Italy would join the party.

But, as matters stand, I see no reason why Italy should not simply live with the kind of yields markets currently demand of it.  I believe it should keep rolling over its debt, according to schedule.  It should, as it were, embrace the markets, saying “If the price is 6 per cent, I’ll pay 6 per cent.  If the price is 7 per cent, I’ll pay 7 per cent – because Italy is going to service her debts.”  If Italy embraces the markets, and shows its willingness to pay, then markets are likely to recover their confidence.

Italy should take no money from the IMF, and no money from the EFSF. Taking from either source would be little short of economic suicide, as it would indicate that Italy were not willing to pay interest rates available in markets that are perfectly serviceable.

Italy does not have a solvency problem.  Neither does it, in fact, have any particular liquidity problem — its bond auctions have shown no more tendency to fail than those elsewhere.  And the prices it needs to pay to roll over its debts are not so high as to threaten Italy’s solvency.

The euro has a problem, and euro problems elsewhere could become Italian problems.  And Italy may have problems of political organisation or comprehension of the issues.  But, within the euro, it is not insolvent.

Jon Corzine steps down as investigations mount

As the scrutiny of MF Global's bankruptcy continues to mount, the trading firm's chief executive, Jon Corzine, stepped down and reportedly hired a criminal defense attorney.

Corzine, who had previously served as a U.S. senator and as the chief executive of Goldman Sachs, announced the resignation Friday morning, five days after MF Global filed for bankruptcy.

In a statement, Corzine said: "I feel great sadness for what has transpired at MF Global and the impact it has had on the firm’s clients, employees and many others."

Corzine said that he would not seek any severance payments as he steps away from the company.

The move is the latest stage in Corzine's descent from the loftiest heights of power. Corzine took over MF Global last year after losing a bid to be reelected as New Jersey governor. He promised to help MF Global grow by making bigger bets with the firm's own money.

That strategy backfired after the firm made a series of large bets on the sovereign debt of struggling European countries.

Now, a growing list of regulators and prosecutors are probing MF Global's actions as it encountered difficulty. Friday morning, the New York Post reported that the U.S. attorney in Manhattan, Preet Bharara, is taking a look at whether the company mishandled customer funds. This is a subject the FBI has already been reported to be looking at.

To help deal with these inquiries, Corzine hired a criminal defense attorney, Andrew Levander of Dechert LLP, according to the Wall Street Journal.

On the regulatory side, it seems as though every lawyer at the Securities and Exchange Commission could get drawn into looking at some potential misdeed related to the firm. The SEC added to its workload when it began looking into possible insider trading in MF Global's bonds during its last days in operation, Bloomberg reports. And the Wall Street Journal gave it yet another potential topic Friday morning when it reported that MF Global may have taken steps to hide from investors its true levels of risk.

Given all these problems, Corzine's statement in stepping down -- and the lack of any mention of remorse -- is coming under fire from industry watchers like Reuters columnist Felix Salmon:

I’m sure you’re sad — that often happens, when you become the living embodiment of the destructive greed of the 1% and a hate figure for millions. But are you sorry? Or are you going to pull a Dick Fuld and live in denial, convinced “until they put me in the ground” that you’re a victim rather than a perpetrator?

This kind of thing is why there’s so much anger aimed at the 1%. Chances are, Corzine will never be prosecuted, let alone convicted, and that he’ll enjoy the comfortable retirement of a centimillionaire for decades to come. He deserves much worse. But right now, when it matters, he can’t even bring himself to say he’s sorry.

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-- Nathaniel Popper

twitter.com/nathanielpopper

Photo: MF Global's Jon Corzine. Credit: Rich Schultz / Associated Press

Consumer Confidential: Bank Transfer Day, hoodia settlement

Here's your fight-the-power Friday roundup of consumer news from around the Web:

--Have any plans for Saturday? How about sticking it to your bank? Nov. 5 is Bank Transfer Day, organized by Kristen Christian, an art-gallery owner in California who is using Facebook to invite people to shift their funds from for-profit banking institutions to not-for-profit credit unions. As of Thursday, nearly 36,000 Facebook users "like" the concept while more than 73,000 indicated they will be taking matters into their own hands. An estimated 650,000 consumers have joined credit unions nationwide since Sept. 29, according to a statement from the Credit Union National Assn., a credit-union advocacy group. That’s the day Bank of America announced its now-aborted $5 debit-card fee.

--If you've been thinking about taking hoodia to help lose weight, don't bother. The Federal Trade Commission says it's settled a case against two companies which hyped weight-loss products based on hoodia, a substance derived from the Hoodia gordonii cactus of southern Africa. The FTC complaint alleged executives at Nutraceuticals International and Stella Labs falsely marketed hoodia products as effective weight-loss and appetite-suppression supplements, even though there was no scientific evidence of such benefits. David Romero, a principal at both companies, was assessed a $22.5-million fine for his role in the marketing claims. Romeo forfeited to the FTC a Vermont vacation home and $635,000 in business loans as part of his settlement. A $4-million judgment was also assessed against Deborah Vickey, a marketing executive at Nutraceuticals International.

-- David Lazarus

Photo: Frustrated consumers are being encouraged to switch banks on Nov. 5. Credit: Ted S. Warren / Associated Press

 

U.S. economy added 80,000 jobs in October, fewer than expected

The nation’s economy continued to grow sluggishly in October, adding just 80,000 jobs as concerns about the future weighed on employers and consumers, curtailing both hiring and spending.

The unemployment rate dipped slightly, to 9.0% from 9.1% the month before, and the government revised upwards employment figures from both August and September. But the economy still isn’t creating the 125,000 jobs a month economists say are needed to bring down the unemployment rate.

“Employers are riding a turtle when we were hoping they’d get on a Thoroughbred,” said Patrick O’Keefe, a former assistant secretary at the Department of Labor who is now director of economic research at accounting firm J.H. Cohn.

The service sector led growth in the month, continuing the nation's shift to a service-heavy economy. Retail trade grew by 17,800 jobs and transportation and warehousing added 9,400. Professional and business services gained 32,000 positions and educational and health services added 28,000.

After a burst of activity earlier this year, manufacturing seems to be losing steam. That sector gained just 5,000 jobs in October, and a separate report released earlier this week by Automatic Data Processing Inc. said that the manufacturing industry shed 8,000 jobs last month.

Government and construction are also struggling. Cuts in state positions dragged down the government sector, which lost 24,000 jobs. Construction shed 20,000 positions.

Groupon IPO: Shares surge on first day of trading

Investors clamored for a piece of Groupon Inc. on its first morning as a public company, sending shares of the online coupon company up nearly 50%.

In the early hours of trading on the Nasdaq exchange Friday, shares of Groupon were up 43%, or $8.50 from its $20 initial public offering Thursday afternoon.

The gains came even as the rest of the stock market was falling. The technology heavy Nasdaq composite index was recently down 1.5%, or 39.50 points to 2658.47.

The $20 IPO was already above the $16 to $18 range that had been expected, and it signaled strong investor demand for the company.

Groupon, which is trading under the ticker symbol "GRPN," had stumbled on its way to the starting gate this summer, revising its public documents and confronting skepticism about its business model.

But the offering remained one of the most hotly anticipated this year -- and one of the largest. The company helped pump up demand by selling only a small portion of its shares. 

Early demand for Internet startups have not always withstood the test of time. Earlier this year, LinkedIn shares skyrocketed in their first days of trading before falling back to earth.

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Groupon prices IPO at $20 a share

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-- Nathaniel Popper

twitter.com/nathanielpopper

Photo:  Charles Rex Arbogast / Associated Press

The Lasting Financial Impact of a Layoff

Losing a job you wanted to keep is never a good thing. But for those who lost their jobs during the Great Recession, the long-term consequences will probably be very significant.

According to an economic analysis by the Hamilton Project, a research group in Washington, those laid off from long-term jobs between 2007 and 2009 are likely to lose a total of $774 billion in earnings over the next 25 years, even if they get new jobs.

The analysis of Census Bureau data, conducted by Michael Greenstone and Adam Looney, looks at how the seven million workers who lost jobs they had held for three years or more at the time of the layoff fared in the two years following the job loss.

The graph below shows all workers who lost their job for economic reasons during the worst seven months of the recession and how they have fared since the job loss.

Including those who have not yet found work as well as those who did find new jobs, the average earnings of the group were barely half what they were before the workers lost their jobs, falling from $43,700 before to $23,000 two years later. The income numbers do not include unemployment benefits.

Focusing just on those who were able to find new jobs, the study found they were earning an average of 17 percent less than they earned in their previous posts.

Mr. Greenstone and Mr. Looney based their calculations of future losses on research conducted by Steven J. Davis, an economist at the Booth School of Business at the University of Chicago, and Till von Wachter, an economist at Columbia University, which found that workers who lose their jobs during recessions lose an average of $112,100 over their careers.

Mr. Greenstone, an economist at the Massachusetts Institute of Technology, said many of the displaced workers either have no college degrees or have skills that are rapidly being outdated, and therefore need education to get back to work in jobs that will match their prior incomes. The sobering data, he said, “highlights the importance of trying to identify training programs that can help this set of workers so they don’t lose that money.”

This post has been revised to reflect the following correction:

Correction: November 4, 2011

An earlier version of this post misstated the period examined in arriving at an estimate that laid-off workers are likely to lose a total of $774 billion in earnings over the next 25 years. It involves those laid off from 2007 to 2009, not between October 2008 and April 2009.

Economy added 80,000 jobs in October; unemployment rate at 9%

Employers added just 80,000 jobs to payrolls in October, fewer than analysts had expected, as cuts in the government and construction sectors continued to weigh down the national economy. The unemployment rate dipped only slightly, to 9.0% from 9.1% the month before, according to new data from the Bureau of Labor Statistics.

Still, the government revised employment figures from previous months, saying the economy had added 158,000 jobs in September, more than the 103,000 than previously reported, and that it had gained 104,000 in August, nearly double the number it had previously reported for that month. Those revisions indicate that the economy is on firmer footing than it seemed to be just a few months ago, analysts say.

"I don't think there's any sign of a recession in this report," said Ryan Sweet, senior economist at Moody's Analytics. "Going forward, the labor market isn't booming, but I don't think there are any signs we're going to take a significant step back."

Private-sector employment led the growth in October, adding 104,000 jobs. The professional and business services, healthcare and leisure and hospitality sectors all performed well. The government sector shed 24,000 jobs and construction lost 20,000.

A separate report released earlier this week by Automatic Data Processing Inc. said that private sector employers added 110,000 jobs in October, buoyed by strength in service-providing sectors. Manufacturing growth slowed last month, the company said, as the industry shed 8,000 jobs.

Despite the job growth, many workers say that the positions being created are of lower quality than the ones they held before the recession. Wages and salaries grew just 0.3% in the three months ending Monday and benefits grew only 0.1%, according to the Bureau of Labor Statistics.

Kevin Friedlander knows it. The 22-year-old Las Vegas resident got laid off from a warehousing job last month and is scrambling to find new work to support his wife and daughter. Each job he’s had since  he got out of the military three years ago pays less and seems more temporary than the one before, he said.

“With almost every job I’ve  had, every day I’ve gone into work it felt like it could be my last day,” he said. “Nothing feels secure, nothing feels stable.”

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-- Alana Semuels

Photo: Job seekers at a career fair in Minneapolis. Credit: Jim Moore/Associated Press