How the 24-Hour Retail Cycle Skewed Labor Data

On almost all accounts, December’s Employment Situation Report was interpreted as good news. However, I see a problem that was only partially broached by the popular press last week. I think a seasonal and unique to 2011 factor supported the labor market last month. This, combined with other seasonal factors I’ve been pointing out throughout December, could be exaggerating job gains. If I’m right, given the short-term nature of this impact, we’ll see some counteracting data in early 2012. Compounding this contrary view of the economic situation, the recession overcoming Europe and the economic growth decay in China are not going to pass without impact to a vulnerable American economic state.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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How the 24-Hour Retail Cycle Skewed Labor Data

The Labor Department reported the unemployment rate fell two-tenths of a point to 8.5%, from 8.7%. December’s report also showed an addition of 200K nonfarm payrolls. Both data points represented improvement and both reached above the expectations of economists, who were reportedly looking for an 8.7% unemployment rate and the addition of 150K jobs, based on Bloomberg’s survey. So why did economists fall short?

I think evidence of this is readily available in the report itself. What caught my eye initially was the increase in the average workweek, which was lauded by many talking heads in the popular press. Average hours worked rose to 34.4 hours, up from 34.3, marking an unexpected increase against economists’ views.

We know the retail sector added another 28,000 jobs in December, but the reason behind it was simply attributed to the holiday shopping season. However, there were dynamic factors at play that reached beyond normal seasonal trend. Many stores stayed open 24 hours or otherwise extended their hours of operation through the holiday shopping period of 2011. It was a trend that was initiated by Target (NYSE: TGT) and Wal-Mart (NYSE: WMT) at the formal start of the shopping period, which this year even preceded Black Friday. Operating managers kept the lights on at select Macy’s (NYSE: M), Toys “R” Us and Old Navy, which is owned by The Gap (NYSE: GPS), among other stores. Clearly, doing so requires additions to the workforce count, which would boost December employment beyond the usual seasonal additions at retailers. However, those extraordinary additions would be quickly let loose post the holidays, and so do not present as strong an economic signal as perhaps some see in the December data.

A portion of the holiday’s temporary additions to the employed pool is also notable in the Transportation and Warehousing segment, where the courier and messenger industry contributed 42,000 of the segment’s 50K in workforce growth in December. UPS (NYSE: UPS) and FedEx (NYSE: FDX) each make public notice of the increase on seasonal demand. With this regular trend well understood by the market, it seems to be overlooking the dynamic change in the creative marketing and operation of the retail industry, which I believe also drove increased workforce counts.

What’s not accounted for in this argument is the 23,000 job increase in manufacturing. I suspect this growth is being driven by the increasing effort in domestic energy production, which is a secular trend and a real driver for ongoing employment. Likewise, the long-term growth in health care has been driven by secular demand on the aging demographics of America, and this would also support manufacturing. I see the mining increase driven by the rising prices of commodities, including gold, silver and rare earth metals. Again, manufacturing is indirectly aided.

Jobs have been created over the course of the year, which is reflective of the slowly improving economic environment. There’s no denying that. However, my concern is that new burden lies ahead, driven by deep recession in Europe and related slowing growth in the domestic economies of the emerging markets. Given that the late 2011/ early 2012 market has fed off what has been viewed as a healthy holiday shopping period, I worry about a different reality that could be reported by retailers for the quarter. That reality should reflect leaner profit margins and many earnings shortfalls on the stores’ deep discounting and long hours of operation, as desperate retailers sought any pull possible to lure market share. Thus, I suggest investors take the holiday-relative economic data for what it is, full of noise and distortion.

Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Ho Ho Humbug to your Labor Data Display

I said it last week and I reiterate it today. Ho ho humbug on Jobless Claims! Yet again, the popular press and mainstream business channels pumped the holiday cheer for weekly unemployment benefits. Still, what I suspect my colleagues missed, probably due to too much eggnog over lunch, was that it’s the week before Christmas… and all through the house, nobody is getting fired, except for maybe the mousy little receptionist.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Ho Ho Humbug!

Weekly Jobless Claims for the week ending December 17 were reported down another 4,000 to 364K. That was off the prior week’s revised figure, which posted marked improvement. However, we noted last week that the holiday season likely played a role in the improvement despite seasonal adjustments. And we noted then, and reiterate now, that even if the labor market were improving, the economic outlook is poised to undermine it once again.

Perhaps because we’ve been scribbling longer than many of the grunts reporting on the subject on Thursday, or maybe just because we care if we’re right or wrong, we noted that this sentimental benefit related to the holiday season existed last year as well. If you’ll recall, the labor market still languished in 2011, and that was during a period of supposed economic growth.

That said, the four-week moving average of jobless claims improved by 8,000 through the period, to 380,250. Again though, the marked improvement from the prior week period combined with the continuation of lower claims levels this week, were the driver. There’s no long-term trend here yet, and I suggest traders wait until mid-January to start buying into a labor market inflection point. Otherwise, ye merry gentlemen may find all your gifts have been lifted by wiser men than ye.

The other great farce found in this regular report is the continuing claims data. This time covering the period ending December 10 (a week lagged), insured unemployment improved by a tenth of a percent to 2.8%. That accounted for 3,546,000 people and an improvement of 79K.

Still, the most unbelievable of the data is in the reported insured unemployment under all programs line, which includes the benefits extension program. According to the DOL, for the period ending December 3, the total number of people claiming benefits in all programs improved by 299,738 and now includes 7,149,769 Americans. This figure in particular has been fluctuating wildly over recent weeks and is highly suspect in my view. If there truly is a drop-off in the number fitting into this poor souls’ pool, I expect it is more likely due to their falling out of the workforce or overrunning their 99 weeks, rather than their finding jobs.

While I probably should feel a little sorry for raining on the holiday party, I in fact do enjoy playing the role of the Grinch here this year. So to all the little Whos in Whoville, I say your joy is unfounded! As a result, any investment flurry inspired by it is confounded! Ho ho humbug to your labor data display.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Job Seekers Believe in Santa Claus

The last few weeks’ jobless claims data almost had me believing in Santa Claus. The weekly applications for unemployment insurance, filed by those who have recently lost their jobs, have trailed off. It’s enough to lead an economist to recalculate, and certainly enough info to give a savvy market strategist something positive to say to disgruntled investors. But, sadly, it’s all just another fairytale – there is no Santa Claus! Sorry to bust the beginning of your bubble...

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Believers in Santa Claus

Weekly unemployment claims for the week ending December 3, 2011, declined 23,000; that’s a lot. But take note dear dreamers, as the claims count was off from a revised prior week figure of 404K. Thus, last week’s count that we all also celebrated for its positive trend, was actually up from the prior week’s 396K measurement. The four-week moving average is still short of 400K, sitting now at 393,250, but it’s close enough to be wary, especially given seasonal influences that might not be properly adjusted for these days.

What I just wrote is controversial because the numbers are seasonally adjusted. However, I argue that due to the dynamic current environment and the degree of unemployment and the state of labor, the seasonal adjustment might not be adequately accounting for what may be a larger percentage of unemployed workers suddenly finding employment in the retail sector than is usual over the historical record. Historical adjustments are not usually dynamic; they’re based on the historical trend which smoothes over the spikes and troughs. That’s fine, but where they can go wrong is when they do not account for changes and situations that do not match the historical record, like today’s unusual environment. Without getting too algorithmic on you, I think I’ve made my point without your needing an aspirin as a result.

The Employment Situation Report for November, published last week, showed that the retail sector added 50,000 new employees on net through the month. I suggest that due to the dynamic environment, retailers were likely running on short staff longer into the start of the holiday shopping season, and have hired in bunches of late. Management of inventory is not the only efficiency gained by technological innovation. Indeed, process improvements stretch to workforce control. Now these points made here are something you’ve not likely read anywhere else, but will read time and again in the future. Please take note when you hear financial gurus quote me on the radio and TV, and complain when “The Greek” gets no credit. It’s happened time and again, but it’s not the fame I want, but the following I deserve for ideas like these. Continuing with the thought, some of the folks who might have applied for unemployment benefits probably passed “Now Hiring” signs on their way there and bypassed the heartache.

Looking at the claims report details, we find the Tooth Fairy isn’t real either. The insured unemployment rate improved by two-tenths of a percentage point, to 2.8%, in the week ending November 26 (reported period). However, those of us who inspect the monthly Employment Situation data know that there have been conspicuous deductions to the workforce. In months and years past, we’ve offered some likely reasons for this trend, including depression and despair.

The unemployment pool is so large and so full of long-term jobless Joes that there’s likely an effect created to this data. As we all know, the holidays can be depressing, especially if you’re not employed. Despair can set in, and while the checks are critical to those receiving them, meeting the requirements of the Department of Labor or the Welfare Department can get tiresome for the tortured among us. Now, in case you were not aware due to a lack of a driver’s license (DMV reference for the slow), government employees aren’t always the most compassionate of people, nor efficient. Thus it’s easy to screw up within the convoluted process of collecting government aid. The workforce count cut we’ve seen recently could be due to this effect. We’ve noted it here before in years past and around this time of year as well.

The total number of Americans claiming benefits of some sort, thus including the unemployment extension program, dropped by an astounding 431,307 in the period ending November 19 (reported today). Look, it may be the anniversary of John Lennon’s passing, and while I am a dreamer, I’m still not a believer in these numbers. You can go ahead and categorize labor data with the story of Santa Claus and the Tooth Fairy. I’m a believer no more.

However, I am a fan of this Saint Nicholas.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Chaos will Rule if We Don’t Loosen them for Unemployment Benefits

The latest weekly jobless claims report covering the period ending October 15 showed claims stubbornly holding above the 400K threshold. However, once again, we’re cataloging here the weekly trend of claimants falling out of coverage, an event we view both suspect and concerning.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

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Chaos Rules

The Department of Labor reported that the weekly flow of benefits filers decreased by 6,000 in the latest period, to 403K (against a revised higher prior period). Illustrating just how stubbornly weekly claims have been holding on above the 400K level, the four-week moving average of jobless claims also measured 403K.

So, with claims running so high, why does the number of people covered under all programs, which includes the still running extension program, continue to decline. This week, the number of Americans covered by any program fell by 124,239, to 6.7 million. That’s a big number, and it continues a trend that has run true for months now.

Where are all those Americans going to? They are not getting jobs. Last month’s data showed a dramatically high level of announced corporate layoffs and a troubling unemployment rate. I will once again reiterate the reason I think this contrasting data point exists, and where I think these Americans have been heading to.

The hoops that the government requires Americans to jump through, to keep them actively seeking work, are strictly adhered to. I suspect the government has not loosened the rules one iota due to the obviously impossible labor environment. In fact, I believe the rules are being kept religiously. So the unemployed man, who for any reason fails to produce his quote of evidence of job search, is dropped out of the program. There are no ifs, ands or buts about it, except the butt they’re being kicked out the door by.

Why would the government want to run the program this way? Firstly, I expect it’s more a matter of the way things work in government jobs, i.e. the DMV, then an active strategy. Besides, it’s probably true that some people exploit the system, and by some means, enjoy getting by on a few hundred dollars a week. Those people need a tight system. However, in today’s environment, I expect we’re sending too many good people out into the cold for bad reasons. And where are they going to? Well, we’ll find them in the foreclosure numbers, the credit default figures and in rising crime data. Oh, and I bet more than a few can be found at Occupy Wall Street demonstrations across the country. So perhaps then, government program policemen might exercise better judgment, before chaos rules.

As always, I like to conclude this regular reporting with the state data:

The highest insured unemployment rates in the week ending October 1 were in Puerto Rico (4.9), Alaska (3.8), Pennsylvania (3.5), New Jersey (3.4), Virgin Islands (3.4), California (3.3), Nevada (3.2), Oregon (3.2), Connecticut (3.1), Arkansas (2.9), and Illinois (2.9).

The largest increases in initial claims for the week ending October 8 were in California (+13,882), New York (+8,568), Texas (+4,644), Washington (+3,728), and Pennsylvania (+3,640) while the largest decreases were in Wisconsin (-1,536), North Carolina (-856), South Carolina (-818), and Virgin Islands (-33).

The shares of employment services firms were slightly higher to mixed on the little changed industry relative data Thursday, with Monster World Wide (NYSE: MWW) up 2.1%, Korn Ferry International (NYSE: KFY) up 1%, 51job (Nasdaq: JOBS) up 1%, Kelly Services (Nasdaq: KELYA) up 0.6%, Manpower (NYSE: MAN) about even, Robert Half (NYSE: RHI) down 0.2%, and General Employment Enterprises (AMEX: JOB) down 1.8%.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Americans are Losing their Unemployment Benefits

The latest weekly jobless claims data seemed dull enough, however, it masks a troubling situation that could blow up for millions of Americans in 2012. The continued heavy flow into the jobless pool reflects an environment where jobs are still hard to get. With Congress unable to pass the President’s Jobs Bill this week, some 6 million Americans could soon be disconnected from the government aid that has so far sustained them; and an inhospitable labor market awaits them.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: NYSE: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.PK, OTC: PSRU.OB, OTC: CRRS.OB, NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, NYSE: DE, NYSE: TIF, NYSE: CO, NYSE: FRO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ.

Americans are Losing their Unemployment Benefits

For the week ending October 8, weekly jobless claims eased by 1,000, but remained at an unhealthy level of 404K. The four-week moving average illustrates the troubling malaise in labor, as the claims average sits at an even higher 408K. In my view, while the flow of benefits filers sits above the 300K level, it depicts a labor market where the odds are stacked against job seekers. Meanwhile, an increasing number of economists are forecasting either recession or a slower rate of economic growth for 2012, and higher unemployment to complement that.

This past week likely raised the blood pressure of some 6 million Americans who will lose their unemployment extension benefits in 2012 if Congress does not pass new legislation to counter the eventuality. Some 1.8 million Americans are estimated to see their last checks in December or January, according to figures from the National Employment Law Project. Those struggling souls will then be shed, desperate and alone, into a job market that remains inhospitable to them especially, because of their long length of unemployment.

In recent articles, I’ve discussed the erosion out of the insured unemployed pool, which is a phenomenon that I suspect could be engineered, or just the result of a system that is too strict to rule, and disqualifies unemployed Americans from their benefits quickly and cleanly. Over time, strict rule may be what is needed to inspire the unemployment rate to contract more deeply, but I believe that time is not today.

Week after week, we see the insured unemployed count decline. The latest Jobless Claims Report shows that some 55K Americans left in the week ending October 1. With regard to the larger pool of Americans receiving any sort of unemployment benefit under all programs, the number dropped by 39,203 in the week ending September 24, to a still high 6.8 million Americans. Many of these folks are receiving unemployment benefits through the extension legislation which will expire at the close of the year. The expiration of the legislation does not equate to the expiration of benefits to all, as that depends on when each person saw their regular benefits expire.

I should clarify that the failure to pass President Obama’s ambitious American Jobs Act does not mean extension benefits are doomed. Congress is now looking toward the piecemeal passage of components of the Act, which includes the continuation of the extensions program.

The latest Weekly Jobless Claims Report and the trend in jobless claims and in American unemployment should provide the clear evidence needed for legislators to extend the extension program. In my view, politics should not get in the way of this important program for hard working Americans who simply have no opportunity for work. Unless legislators want to see the Occupy Wall Street movement at their office doors, they would be wise to pass it quickly and without political hoopla.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB) and the job creators, Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Putrid Jobs Data

The stock market gapped open higher Friday, reportedly on the monthly Employment Situation Report. Reaching the wire before the bell, the news of the addition of 103K net jobs in September was certainly relieving. But by midday, and likely on the understanding of the details of report, stocks were in the red.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Putrid Jobs Data

The outlook was dim heading into Friday’s reporting of the jobs data. Economists forecast the unemployment rate would deteriorate to 9.2%, from the 9.1% rate reported in August, according to Bloomberg’s survey. The August data, showing no change in employment, had most market watchers on edge ahead of the reporting for the final month of the third quarter. The economic data flow since has been bad to mildly morose. Consumer sentiment has been the most concerning, and the mood of manufacturing purchasing managers has neither proven optimistic of late. Thus, there was little reason to expect good news out of the Labor Department, and neither did we receive any. However, the data we did find was better than August, and that was enough to quell recession drum beaters at least through the morning hours.

The government reported the net addition of 103K nonfarm payrolls in September, but 45K of those were on the return of Verizon (NYSE: VZ) workers from strike. Still, economists knew about those, and so the result still effectively surpassed their consensus expectation for the addition of 65K payrolls this month. Before you break out the champagne, let me remind the reader that in absolute terms, the month’s job growth was still lackluster. Indeed, given population growth, we can go so far as to say this was disappointing news, and the unemployment rate verified that.

Yet, the government gave us a little medicine for last month’s headache, which seemed to help some Friday morning. The August tally for payrolls, which initially recorded no change in the job market, was revised higher to +57K. Likewise, July was ratcheted up to +127K, from the initially reported +85K. As the result for August was initially traumatizing, the change to something somewhat digestible soothed the market a bit. Again, though, temper your enthusiasm, because these figures still stink; they simply stink a little less putridly. Indeed, the weekly jobless claims data has held above the troubling 400K level into October.

The driving segments of growth were found in the private sector, where 137K net new jobs were created last month. The public sector, the current focus of financial distress, dropped 34K jobs. Municipalities seem to still be doing the most damage, despite US Treasury Secretary Timothy Geithner’s now well-aged forecast that the worst was over for states and cities long ago (yeah, we were listening and we remember). Local governments dropped 35K hard working Americans last month, and municipalities have cut 535K jobs since September 2008. Meanwhile, the Postal Service shed another 5K last month. Certainly, the federal government is not through acting counterproductively just yet either, and now that we don’t even fight wars to keep people working, there’s another outflow of jobs. Challenger Gray & Christmas reported the U.S. Army announced troop reductions of 50K servicemen last month.

Within the private sector, the origins of growth were somewhat perplexing. One regular economic support continued to hold weight, with the health care sector adding 44K jobs through September. Professional and Business Services rallied 48K net new payrolls somehow, with 19.4K of those coming through the temporary workforce. In times of uncertainty, corporations will often look toward temporary help before investing in full-time employees. This bit of activity probably supported buying Friday morning as much as anything. It didn’t help the shares of employment services firms much though through the close, as outside of Robert Half’s (NYSE: RHI) 0.9% increase, others like Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN) and Monster World Wide (NYSE: MWW) declined.

Then it just gets weird. With little sign of a housing recovery, the construction sector added 26K jobs. The report indicates, though, that these jobs came in the non-residential segment of construction, in heavy and civil work. Still, the President’s jobs bill is not even being considered by Congress yet, so it’s hard to pinpoint where these construction laborers are working. The Retail Trade somehow found room for another 13.6K jobs in the dead zone between back-to-school and holiday seasons.

Where construction and retail supported enthusiasm, the manufacturing sector acted as expected in my view. Some 13,000 jobs were shed in the recently wavering goods producing segment of the economy. Finally, financial services shed 8,000 jobs, in what I expect is the beginning of renewed difficulty for the sector. Certainly, there’s evidence of it in layoffs at HSBC (NYSE: HBC), Bank of America (NYSE: BAC), Goldman Sachs (NYSE: GS) and others.

The government reported the national unemployment rate stuck at 9.1% in September, which while beating economists’ forecasts, continues to reflect a depressed state of labor. Things remain worse for minorities, with unemployment at 16% among African-Americans and 11.3% among Hispanics. The percentage of unemployed Americans who have been that way for an extended period (27 weeks or more) continues to be elevated. The 6.2 million Americans that fit this description make up 44.6% of the unemployed pool. The number of Americans working part-time, who would rather be in full-time jobs, increased by 444K in September, to number 9.27 million Americans. 130K of the involuntary part-timers had their hours reduced due to slack work conditions. The number of Americans “marginally attached to the workforce,” which means they have not looked for work for at least four weeks, improved some toward 2.511 million Americans. Unfortunately, those workers who are “discouraged,” or believe there are no jobs for them any longer, increased a bit to 1.037 million.

In calculating “underemployment,” if we add back the excluded 2.511 million displaced workers to the labor market, and include the 9.27 million underemployed part-timers in the unemployed count, adjusted unemployment reaches ((13.992M + 2.511M + 9.27M) / (154.017M + 2.511M)) * 100 = 16.5%. For months, we tracked this data point which better reflects the harsh reality of our nation, though we stopped producing this article regularly over recent months. Still, I can say that in the spring of this year (March), this rate had improved to as far as 15.7%. Today, though, it is moving backward to where it was in the summer of 2010, and that’s the wrong direction. Therefore, stocks were correct in their reconsideration of what was painted by the popular press and talking heads with stakes in the game as good news.

Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.PK), Purespectrum (OTC: PSRU.OB) and Corporate Resource Services (OTC: CRRS.OB).

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Bad Moon Rising in Labor and Economy

There’s a bad moon rising, as seen in the weekly jobs data from the Department of Labor (DOL). Weeks ago, we warned that this economic metric might this time be a leading indicator of recession in such a sensitive labor environment, which characterizes the day. Unfortunately, the latest data seems to support our concerns. And, the number of folks receiving benefits is on the decline nonetheless, making for a bad moon rising of potential civil concern. If politicians continue to prioritize selfish individual and party goals, and do not change the tone of politics to one of unity and progression for the nation’s sake, they risk sending this crisis into a new and more dangerous phase. Mark my words, and do all you can to prevent it, or the images we see of Greek street fires could emanate in the future from Detroit and LA.

Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.

Relative Tickers: NYSE: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.PK, OTC: PSRU.OB, OTC: CRRS.OB

Bad Moon Rising in Labor and Economy

The DOL reported Weekly Jobless Claims for the week ending September 10 increased by 11,000, to 428K. Last week’s data was even revised higher, to 417K, from 414K. As usual, economists held close to the prior week result in their forecasting for this week, and so a consensus estimate of 412K was off. The trend is clear here now, with the four-week moving average up to 419,500, up 4K this week alone.

As in previous data, the number of insured unemployed decreases more often than it rises of late. In my estimation, this is not the result of improving employment, but because of other issues. Firstly, the long-term unemployed are outlasting their extended unemployment insurance benefits. Secondly, red tape and tight regulation at the street level are likely leading struggling Americans to fall out of qualification for the benefits they are so dependent upon. The government even dares to audit these people and ask for money back, while keeping tax breaks for the richest Americans in place. And thirdly, some folks are finding whatever work they can and leaving their only slightly less valuable benefits behind. My ventures into Harlem and my work with the poor have shown these things to be true.

The insured unemployment rate stuck at 3.0% this last week, but the number decreased by 12K. Of those people receiving a benefit of some sort, including unemployment insurance extensions, the number fell by 25,033, to 7.1 million Americans in the August 27 period. On the surface, this looks like good news, but we know better.

Extended benefits were still available in Alabama, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Washington, West Virginia, and Wisconsin during the week ending August 27. However, how many Americans are nearing their week limit for this long-standing, foreclosure mitigating, welfare preventing, homelessness negating and civil unrest halting assistance?

If we do not either get these long-term unemployed Americans back to work, or keep the money flowing to them, we face increasing likelihood of civil unrest, especially heading into the election season. The unsettling events that are occurring overseas in nations with higher unemployment and longer sitting indigestion, are nearing the realm of possibility in the U.S. as well now. Distaste for Washington is mutating into pure hatred, and what has happened on the fringe, acts of “insanity” by unstable individuals, could then become possible for stable but financially troubled people.

We need to cure this thing today, and politics must change tone to a more progressive message of national unity. Otherwise, the directional and polarizing messages of political parties will incense acts of desperation and push chaos to replace civility in our great nation. Any politician with a true love for his country would prioritize his country now. The tone of political debate must remain civil and the language must be responsibly chosen. Recent words by good men, but poorly chosen, like from union leader James Hoffa over Labor Day, not to mention fringe Tea Party fire-starters, are dangerous. Making a political point is one thing, but telling crowds to “take out” Tea Party “sons of bitches,” as Hoffa did, can start riots. We do not need that spark to kindle the dry wood of dissatisfaction stacked high across America.

As always, I like to provide readers with the data from the most troubled states:

The highest insured unemployment rates in the week ending August 27 were in Puerto Rico (4.4), Pennsylvania (4.2), New Jersey (4.0), California (3.7), Connecticut (3.7), Oregon (3.5), Rhode Island (3.5), Nevada (3.4), Alaska (3.3),and New York (3.2).

The largest increases in initial claims for the week ending September 3 were in Kansas (+1,969), North Carolina (+1,450), Washington (+1,443), New Jersey (+1,324), and Texas (+1,239) while the largest decreases were in New York (-2,854), South Carolina (-2,118), Puerto Rico (-1,611), California (-576), and Virginia (-216).

The stocks of employment relative firms and business services are generally higher today due to their sensitivity to the economy, and given the positive news out of Europe, which has the Dow also higher by 1.6%.

Movement of Labor & Business Services Stocks
Robert Half (NYSE: RHI)	2.1%
Korn Ferry (NYSE: KFY)	1.5%
Monster Worldwide (NYSE: MWW)	2.1%
Manpower (NYSE: MAN)	3.5%
51Job Inc. (Nasdaq: JOBS)	2.1%
Paychex (Nasdaq: PAYX)	3.0%
Kforce (Nasdaq: KFRC)	Unch.
TrueBlue (NYSE: TBI)	1.3%
Dice Holdings (NYSE: DHX)	4.4%
Kelly Services (Nasdaq: KELYA)	1.7%
CDI Corp. (NYSE: CDI)	-0.6%
Cross Country Healthcare (Nasdaq: CCRN)	3.7%
On Assignment (Nasdaq: ASGN)	1.1%
AMN Healthcare Services (NYSE: AHS)	1.4%
Barrett Business Services (Nasdaq: BBSI)	1.4%
Hudson Highland Group (Nasdaq: HHGP)	2.0%
StarTek (NYSE: SRT)	0.6%
RCM Technologies (Nasdaq: RCMT)	1.7%
VirtualScopics (Nasdaq: VSCP)	-0.8%
American Surgical (OTC: ASRG.OB)	Unch.
Medical Connections (OTC: MCTH.OB)	Unch.
iGen Networks (OTC: IGEN.OB)	Unch.
St. Joseph (OTC: STJO.OB)	-8.9%
General Employment Enterprises (NYSE: JOB)	-6.9%
Total Neutraceutical (OTC: TNUS.OB)	Unch.
TeamStaff (Nasdaq: TSTF)	0.5%
Stratum (OTC: STTH.PK)	Unch.
Purespectrum (OTC: PSRU.OB)	Unch.
Corporate Resource Services (OTC: CRRS.OB)	29%
Prices at approximately 3:00 PM EDT

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Layoffs Run High

Sitting here just hours ahead of the monthly Employment Situation Report, upon which volatility could swing stocks going into the long holiday weekend, we thought we would take a closer look at the week’s employment data. Specifically, we want to talk about the disturbing layoff data that was reported on Wednesday.



Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.



Relative Tickers: NYSE: RHI, NYSE: KFY, NYSE: MAN, NYSE: MWW, Nasdaq: KELYA, Nasdaq: JOBS, NYSE: JOB, Nasdaq: CECO, Nasdaq: PAYX, NYSE: ASF, Nasdaq: KFRC, NYSE: TBI, NYSE: DHX, NYSE: SFN, NYSE: CDI, Nasdaq: CCRN, Nasdaq: ASGN, NYSE: AHS, Nasdaq: BBSI, Nasdaq: HHGP, NYSE: SRT, Nasdaq: RCMT, Nasdaq: VSCP, OTC: ASRG.OB, OTC: MCTH.OB, OTC: IGEN.OB, OTC: STJO.OB, OTC: TNUS.OB, Nasdaq: TSTF, OTC: STTH.OB, OTC: PSRU.OB, OTC: CRRS.OB, NYSE: BAC, NYSE: JPM, NYSE: GS, NYSE: C, NYSE: MS, NYSE: WFC, NYSE: TD, NYSE: PNC, NYSE: GE, NYSE: WMT, NYSE: MCD, NYSE: AA, NYSE: AXP, NYSE: BA, NYSE: CAT, Nasdaq: CSCO, NYSE: CVX, NYSE: DD, NYSE: DIS, NYSE: HD, NYSE: HPQ, NYSE: IBM, Nasdaq: INTC, NYSE: JNJ, NYSE: KFT, NYSE: KO, NYSE: MMM, NYSE: MRK, Nasdaq: MSFT, NYSE: PFE, NYSE: PG, NYSE: T, NYSE: TRV, NYSE: UTX, NYSE: VZ, NYSE: XOM, NYSE: DE, NYSE: TIF, NYSE: CO, NYSE: FRO, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Layoffs Run High

Friday offers the Employment Situation data from the U.S. government, but we received three other important economic data points this week that also offer insight into the situation. One report I found interesting was the Challenger Job-Cuts data.



When Challenger, Gray & Christmas reported announced corporate layoffs had drifted 23% off of July, the popular press ran with the headline and left important details out. As always, I feel it’s my duty to keep you informed about the true state of affairs. While the August layoff count was lower than July, it was also 47% higher than last year’s count. It’s irresponsible not to note that July’s total announced layoffs of 66,414, was the highest in 16 months. Thus, the 51,114 declared dismissals in August are still greatly significant and a negative factor for investor consideration.



Over the last three months, the year-to-date layoff count has closed in on last year’s total. Yet, before that, layoffs were running at a much more encouraging rate. This is a sign of economic deterioration, the latest in a series. Through August, announced layoffs are now just 2.9% below the eight month total of 2010.



Unfortunately, the public sector led the firing brigade in August, letting 18,426 people go. For the year now, the government (both local and federal) has cut workforce by 105,406. Just to give you an idea of how important this is, Challenger tells us the next closest segment was Retail with its 40,173 firings, with 5,901 of those coming in August. That’s right, retail, which supposedly benefited from personal spending growth in July, is leading the private sector in layoffs this year.



The layoffs in government are “unfortunate,” since the government should be driving economic recovery by creating jobs both in the private and public sector. It has direct control over what occurs in the public sector, but fiscal mismanagement and political positioning have disturbed the natural course of action. Hopefully the President will have a change in course to report in his speech on September 8, because public work projects will go much farther toward restoring our economic health than most of the other stimulants attempted by both the Bush and Obama Administrations. Do you remember those misguided and irrelevant $300 checks the Bush Administration flailed out as a short-term fix to a bleeding artery? I do. What we need to do now is get some of the people in the hardest hit industry back to work, construction workers.



In August, it was the federal government that levied most of the pink slips, cutting back military personnel. However, the lull in local government cuts should not last for long, considering ongoing declines in revenue and a dwindling amount of federal support.



What gives me anxiety now is that this report covers announced corporate layoffs, and therefore excludes many of the most important employers within the nation, small businesses. The Small Business Optimism Index has taken on a new name of late, given to it by the lead economist at the National Federation of Independent Business (NFIB), the “Pessimism Index.” The Employment Situation Report will likely shed more light on the small business situation. However, given that corporations are likely freezing hiring now, as some increase firings, and with the government shedding jobs instead of creating them, I’m looking for labor market deterioration before better days dawn, assuming they do.



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).



Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.

Jobless Claims Could Prove Barometer of New Downturn

On Thursday, many in business media sounded just like we did last week. You’ll recall that in our article covering the weekly jobless claims report, we said the small increase in claims could be the start of a new trend of increasing layoffs. We have been talking about the “frozen consumer and purchasing manager” of late, and the panicked investor to boot. It remains our view that the third quarter may very likely sink into recession as a result. Finally, we said to keep an eye on the weekly claims count as a potential barometer of such catastrophe. Well, weekly claims unfortunately offered another increase Thursday, and caught the attention of a good many more Wall Street pundits as a result. So what are we saying this week then?



Our founder earned clients a 23% average annual return over five years as a stock analyst on Wall Street. "The Greek" has written for institutional newsletters, Businessweek, Real Money, Seeking Alpha and others, while also appearing across TV and radio. While writing for Wall Street Greek, Mr. Kaminis presciently warned of the financial crisis.



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Jobless Claims Could Prove Barometer of New Downturn

Jobless claims rose by 5,000 in the week ending August 20, edging up to 417K. The prior week was also revised higher to 412K, from the initially reported 408K. There was a special factor at play over the last two weeks, as the Verizon (NYSE: VZ) work stoppage drove the filing of at least 12,500 claims in the August 13 ending period and 8,500 in the week ending August 20. Still, this effect should have driven a trend of decline for this latest week, over the week just prior, and it did not. Perhaps the four-week moving average of weekly jobless claims would be fattened by the stoppage. The average increased by 4,000 this week, to 407,500. It’s my view that the average should be affected over the coming weeks by the deterioration trend forecast here for the economy.



The insured unemployment rate actually improved by a tenth of a percentage point, to 2.9%, in the August 13 period. The number of insured unemployed fell by 80K to 3.641 million. The total number of unemployed people receiving benefits under a program of some sort, including the extension program, fell by 45,989 in the August 6 ending period, to 7,290,189. As we posited in last week’s review, we suspect a good many of these Americans disappearing from benefits programs did not find new employment, but rather lost benefits due perhaps to a tightening set of rules and regulations for the receipt of those benefits. Governments are tightening the noose in order to expose fraud, but they are in fact squeezing the poor. It’s quite a shame, considering that temporary tax cuts for the rich remain in place well after their intended duration.



Even though this regular labor data point is usually a lagging indicator, I think this time would be different. This is because corporate managers are not asked to change mindset from economic boom to bust as in normal cycles. Rather, we’ve continued to languish in a slow growth and uncertain environment, and are now potentially looking toward renewed downturn. Executives and managers would be quicker to cut costs as a result. That’s this analyst’s view anyway.



Article should interest investors in Paychex (Nasdaq: PAYX), Manpower (NYSE: MAN), Robert Half International (NYSE: RHI), 51Job Inc. (Nasdaq: JOBS), Monster World Wide (NYSE: MWW), Korn/Ferry International (NYSE: KFY), Administaff (NYSE: ASF), Kforce (Nasdaq: KFRC), TrueBlue (NYSE: TBI), Dice Holdings (NYSE: DHX), Kelly Services (Nasdaq: KELYA), SFN Group (NYSE: SFN), CDI Corp. (NYSE: CDI), Cross Country Healthcare (Nasdaq: CCRN), On Assignment (Nasdaq: ASGN), AMN Healthcare Services (NYSE: AHS), Barrett Business Services (Nasdaq: BBSI), Hudson Highland Group (Nasdaq: HHGP), StarTek (NYSE: SRT), RCM Technologies (Nasdaq: RCMT), VirtualScopics (Nasdaq: VSCP), American Surgical (OTC: ASRG.OB), Medical Connections (OTC: MCTH.OB), iGen Networks (OTC: IGEN.OB), St. Joseph (OTC: STJO.OB), General Employment Enterprises (NYSE: JOB), Total Neutraceutical (OTC: TNUS.OB), TeamStaff (Nasdaq: TSTF), Stratum (OTC: STTH.OB), Purespectrum (OTC: PSRU.OB), Corporate Resource Services (OTC: CRRS.OB), Bank of America (NYSE: BAC), J.P. Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS), Citigroup (NYSE: C), Morgan Stanley (NYSE: MS), Wells Fargo (NYSE: WFC), TD Bank (NYSE: TD), PNC Bank (NYSE: PNC), General Electric (NYSE: GE), Wal-Mart (NYSE: WMT), McDonald's (NYSE: MCD), Alcoa (NYSE: AA), American Express (NYSE: AXP), Boeing (NYSE: BA), Caterpillar (NYSE: CAT), Cisco Systems (Nasdaq: CSCO), Chevron (NYSE: CVX), DuPont (NYSE: DD), Walt Disney (NYSE: DIS), Home Depot (NYSE: HD), Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM), Intel (Nasdaq: INTC), Johnson & Johnson (NYSE: JNJ), Kraft (NYSE: KFT), Coca-Cola (NYSE: KO), 3M (NYSE: MMM), Merck (NYSE: MRK), Microsoft (Nasdaq: MSFT), Pfizer (NYSE: PFE), Procter & Gamble (NYSE: PG), AT&T (NYSE: T), Travelers (NYSE: TRV), United Technologies (NYSE: UTX), Verizon (NYSE: VZ), Exxon Mobil (NYSE: XOM).



Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only.