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I know I cannot make it through my day without a Greek coffee, whether it be a hot one served in a cute little cup or a frappe served cold in the afternoon. Take today's business news and analysis chilled, served by your favorite Greek coffee maker... My favorite Greek coffee maker is still a secret, but I'll let you know soon enough.
Weekly Initial Jobless Claims
The unemployed can enjoy Greek coffee more often and with greater focus than the rest of us, and so there seems something meaningful to covet in joblessness. The Department of Labor reported Initial Jobless Claims for the week ended January 30 in the pre-market today. Claims have stuck hot since employers' holiday kindness wore thin, just as "The Greek" told you it would when early-2010 low weekly claims had talking heads all fired up about economic recovery prospects.
Today's data showed benefits filers numbered 480K, versus the 472K (revised) reported last week. The hot tally far exceeded economists views as well, which were set at 455K. The four-week moving average also increased by 11,750, moving to 468,750. However, the seasonally adjusted advanced unemployment rate stuck at 3.5%.
"Be careful now, because if January's unemployment rate, which is due for report on Friday morning, comes in light, it may not reflect reality based on my reflections."
Monster Employment Index
While we are on employment (the topic of), and enjoying our Greek coffee, Monster Worldwide's (NYSE: MWW) Monster Employment Index (MEI), was also published this morning. The MEI declined by a point, falling to 114 in January. Measuring online demand for new hires, Monster's measure equaled the lowest mark of the last 12 months, and was down from 118 at this time last year.
Monster recorded declines in all 28 of the major metro markets measured. Year-over-year, 25 of the 28 markets continued to report decline. Still, online job availability rose in 8 of the Index's 20 industry sectors in January and in 7 of the 23 occupational categories monitored. Based on the MEI results, employers are hiring in the education, arts, entertainment and recreation industries, while construction and wholesale trade contracted from last month. Yesterday's economic data (ISM Non-Manufacturing Index) seems to conflict, as it showed weakness in recreation and strength in wholesale trade. Generally speaking though, the situation is clear, labor is lagging.
Factory Orders gained 1.0% in December. Economists were looking for a 0.3% increase, based on Bloomberg's survey. New orders rose 1.2% when excluding transportation, which posted a decline of 0.5%. Inventories fell for the first time in three months, slipping 0.1%. The inventories-to-shipments ratio eased to 1.29.
Productivity & Costs
The Bureau of Labor Statistics reported on productivity and costs this morning. Productivity has been gaining as demand for goods has resumed without the advent of new hiring. Trust me, it's not because folks are drinking more Greek coffee. Nah, people are just working harder to get more done. Productivity improved 6.2% in the fourth quarter, versus the economists' consensus expectation for a 7.0% increase. Output rose 7.2% at the cost of a 1.0% increase in hours worked.
"... the increase in hours worked is a positive indicator for employment. Hours worked will eventually hit a threshold level where new hiring will be necessary."
It may not be obvious, but the increase in hours worked is a positive indicator for employment. Hours worked will eventually hit a threshold level where new hiring will be necessary. This latest quarter increase in hours worked was the first such gain since the second quarter of 2007. Productivity increased 5.1% through the full 2009, marking the best gain since 2001.
As you might expect, unit labor costs ease as productivity improves. Q4 showed a 4.4% cut in unit labor costs, helping corporate profit margins. Still, at some point, economic demand will benefit the currently unemployed American worker. We are moving in the right direction, given inventory restocking transforms into sustainable economic growth. Hourly compensation managed to increase 1.1%, but the productivity gain outpaced it, driving the decreased cost of labor. Unit labor cost declined 2.8% over the last four quarters.
Consumer Confidence Drops in February
The RBC Cash Index lost significant ground in February, indicating a sharp loss in consumer confidence levels. RBC's confidence measure fell 18.9 points, to a mark of 39.4. This month's reading varied from recent checks in that it showed concern over both the current situation and the future. In the past, people actually had some hope. RBC's survey showed that labor market weakness and stock market volatility weighed most on consumers' troubled minds this month.
RBC Component Index Changes:
- Current Conditions Index: -21.1 to 30.5
- Expectations Index: -19.6 to 48
- Jobs Index: -13 to 54.9
- Investment Index: -17.3 to 40.8
Troubling spattings of news across Europe have helped the dollar to a seven-month high. A euro only costs $1.3736 now. Book my flight to Greece now please... Unfortunately, I'll find everyone on strike when I get there.
The European Central Bank (ECB) met today to announce its latest monetary policy. The ECB's Governing Council decided to keep the eurozone's key interest rate unchanged. ECB Chief Jean-Claude Trichet said that economic expansion continued around the turn of the year, and that price developments are expected to remain subdued over the policy relevant horizon.
German Factory Orders
December Factory Orders were reported unexpectedly lower in Germany today. Orders declined 2.3%, all but negating November's order growth of 2.7%. Economists' expectations were for moderate growth of 0.2%. The depth of decline is cause for alarm, though durable goods orders often fluctuate wildly due to price. Export orders fell 3.2%, while domestic demand fell 1.4%. Demand within the euro region surged 9.5%. The DAX Index fell 2.45% Thursday, but that was in line with broader decline throughout Europe. The DJ Euro Stoxx 50 dropped 3.5%.
Greek Labor Strife
The Athens Composite Share Index dropped 3.3%, as Greek tax collectors and customs officials began a two-day strike. As a result, trucks destined to deliver goods to Greece are backed up at the nation's borders. Greece's austerity plan, just approved by Brussels, calls for hard actions that the Greek citizenry is having a hard time swallowing. Greek civil servants have a strike planned for next week, and the nation's largest union, the GSEE, will stage a walk-out on February 24th.
Long time Wall Street Greek readers should recall long ago scribblings here that discussed how Europe would have an especially hard time dealing with crisis due to its cultural aspects, demands and needs. Well, it's playing out for you now.
Corporate News Drivers
Chain Store Sales
Retailers mostly reported same-store sales today for the month of January. Thomson Reuters compiles data on 30 important retailers, and noted that this January's sales increased 3.3%. That's a marked improvement over last January's sales drop of 5.7%. Now growth is good, but we must not lose sight of the fact that last year's sales levels were simply atrocious. Thus, comparisons are going to be appealing.
Individual notables include:
- Costco (Nasdaq: COST): Sales rose 8%
- Macy's (NYSE: M): +3.4%
- Limited Brands (NYSE: LTD): +6%
- The Gap (NYSE: GPS): +5%
- Nordstrom (NYSE: JWP): +14%
- Hot Topic (Nasdaq: HOTT): -13.1%
- Wet Seal (Nasdaq: WTSLA): -3.7%
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