ADP Private Payrolls and Challenger Job Cuts Data Examined

Jobs Data

The latest two labor market data-points to reach the business wire offered mildly positive news that contained components of concern. We examine March's ADP Private Employment Report and Challenger's Job-Cuts Report herein.

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

ADP Private Payrolls and Challenger Job Cuts Data Examined

ADP's Private Employment Report for the month of March showed another plus 200K increase in its private nonfarm payroll estimate. ADP sees private payrolls rising 201K in March, which it says was in line with economists' expectations and consistent with consensus expectations for the federal government tally of private payrolls, due Friday. ADP also revised its February estimate slightly lower, to 208K, from the 217K reported initially.

The company's commentary indicated this level of change was consistent with a decreasing unemployment rate. It also reported that the last four months of estimates have averaged 211K, which is much higher than the four months just prior, with the average for that period, ending in November, at +74K. That said, ADP has a record of mismatching against the federal government data (at least of late), based on my unscientific observation, which I'm sure plenty of market watchers would agree with. Given its proximity to the government release, just two days prior, I'm not sure the report really carries much weight anyway. Investors tend to just wait a couple days for the DOL data before directing their dollars.

Most of March's improvement was found in the service sector and in smaller sized firms, or the "sweet spot" of the American bat. ADP noted the service sector likely added 164K net jobs in March. That's a lot, but it’s less than February's 187K net job additions for the most important segment of the American economy. Growth within the segment was spread proportionally to the importance of each size segment of American business. So most of the gains came in small-sized companies (0 to 49 employees), where a net 89K jobs were added within small services businesses. Mid-sized services firms (50 to 499) added an estimated 61K jobs, while large servicers (500+) added 14K jobs.

Within the goods producing sector, an estimated 37K jobs were produced in total, spread among 13K in small firms, 21K in medium sized, and 3K by large goods producing firms. Manufacturers added an estimated 37K jobs as a group. Construction employment is also isolated out, and was estimated to have shed 5K jobs in March. Financial services supposedly added 4K employees.

Overall, small-sized firms were estimated to have added 102K jobs, while medium-sized firms were reported to have added 82K and large firms 17K. This again is in line with the spread of jobs across American firms. Thus, there is no obvious anomaly or significant skew to growth that might be inconsistent with the spread of job opportunities that exists among firms, either in goods/services or in the sizes of firms, as far as I can see based a thumbnail of this data.

We do not necessarily dispute ADP's report, but neither are we impressed by the estimated job growth. It is not stellar, and the gains in small businesses are often simply eating capital of well-funded but doomed to fail start-up businesses, like perhaps many blogs. Also, we expect the public sector will pull jobs from the economy this month, given intensifying budget situations across the country. There's evidence of this in Challenger, Gray and Christmas' report for this month, which we detail in the paragraphs that follow.

Challenger, Gray and Christmas reported on Announced Corporate Layoffs for March today as well. Challenger reported improvement, with job cuts decreasing to 41,528, versus the 50,702 noted in February. That month however, was out of place compared to the last half year or so. In fact, through the first quarter, only 130,749 job cuts were declared, which was the lowest for any quarter since 1995.

However, while the total figure came down in March, the segment that is bothering me most these days, the public sector, posted a 17% increase in announced corporate layoffs, to 19,099. That said, the public sector has been shedding jobs for some time now, and so year-over-year comparison presents a completely different view of the situation. In fact, against last March, announced layoffs are down 62% from the prior year period.

That said, Challenger Executive Vice President Rick Cobb expressed concern about upcoming layoffs at the municipality and federal level, given budget battles currently underway. Still, and as we have said before within these pages, it appears that barring a cataclysmic or game-changing event, private organizations are operating at tight workforce levels that would not easily allow for further reductions... barring some important change.

While old areas of weakness, including the Pharmaceuticals, Telecommunications and Automotive industries are much improved in terms of job shedding, there are new leaders cutting costs. The retail sector for instance has already shed 15,768 jobs this year, though that's less than at this time last year. However, the Aerospace & Defense industry cannot boast of the same comparison, as its 7.3K job cuts year-to-date compare against just 2.7K at this time last year. The Financial Sector has also reduced workforce this year by a greater amount than last year.

California leads all layoffs this year, with 22K, which should not be a surprise given its relative population size. The District of Columbia is second though, with 14K layoffs year-to-date, but we can reconcile it to federal cutbacks and related government job cuts. Also playing a role in DC, non-profits are forced to reduce workforce during tough times, as contributions dwindle. Third is Michigan, which is just sad given the tough time the state has already had to deal with due to the significant consolidation of the auto industry.

The good news this last month was that when excluding government jobs, the damage is not so deep. No particular industry had more than 2,400 job cuts. The bad news is that among the reasons for layoffs, the leaders were restructuring, closed down businesses and cost cutting. Truth be told, there aren't many digestible reasons for layoffs on the board. If the current pace holds, we'll match last year's layoff pace, but there is a marked deceleration that will likely take the count well under 2010's 530K layoffs, barring unexpected event.

One such event that we cannot necessarily call unknown any longer is the Middle Eastern unrest driven spike in gasoline prices. Fuel price increase, in conjunction with rising commodity costs and food prices driven by global demand/supply imbalance and dollar dilution, is putting consumers into a sour mood (as just discussed at our blog yesterday). As a result, a new recession may not be too farfetched of a scenario, and anecdotal evidence tells me the economy is vulnerable to a shock like the rise in gas prices. And while employers are not firing, they do not seem to be hiring either, at least based on Challenger's take and our analysis of the unemployment rate. Challenger's report shows announced corporate hiring plans at only 10,869 in March, versus 13,994 last year; though February boasted a count of 72,581. That said, the current hiring pace through 3 months, would have total job creation about matching last year, given no change for the positive.

It is as if the economy is lying in waiting, businesses carefully watching, consumers entrenching, all waiting for the cloud of uncertainty to pass over. Only the investor ventures forth, boldly, but not by courage; instead by greed, he is driven to precede economic revival.

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). The day’s earnings included Deere (NYSE: DE), Tiffany (NYSE: TIF), China Cord Blood (NYSE: CO) and Frontline (NYSE: FRO).

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.

Business News: Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

Today's Coffee

Today's Business Summary highlights economic data and business news from: ADP on Private Payrolls, Challenger on Job Cuts, the Mortgage Bankers Association on Mortgage Activity, Fed indications toward QE3 completion, Family Dollar's strong quarter, Cephalon's intriguing trading and its hostile bid from Valeant Pharmaceuticals, logistical issues at Japanese automakers, Obama's energy push, the EIA Petroleum Status Report, Canadian inflation, the repercussions of Japan's disaster, Salesforce.com's acquisition and more.

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: Nasdaq: CEPH, NYSE: VRX, NYSE: FDO, NYSE: TM, NYSE: HMC, Nasdaq: NSANY, NYSE: BP, NYSE: F, NYSE: GM, NYSE: WMT, NYSE: JPM, NYSE: TSN, NYSE: AYI, Nasdaq: AETI, NYSE: AMN, Nasdaq: AMCF, AMEX: BNX, Nasdaq: CWS, OTC: CDELB, Nasdaq: DSCI, AMEX: DRJ, Nasdaq: DRYS, Nasdaq: DIET, AMEX: LZR, NYSE: ES, Nasdaq: ENMD, AMEX: EVK, Nasdaq: VIFL, NYSE: GMR, Nasdaq: GAI, AMEX: GRZ, NYSE: GU, AMEX: INV, Nasdaq: JOSB, Nasdaq: LACO, NYSE: LNN, Nasdaq: MERR, NYSE: MOS, Nasdaq: PTIX, NYSE: SIG, NYSE: UNF, Nasdaq: UNTK, Nasdaq: VCGH, AMEX: WTT, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ

Business News: ADP and Challenger Jobs Data, FDO, CEPH, QE3, Mortgages, Japanese Autos, Canadian Inflation, Oil Inventory

By "The Greek"

ADP Private Employment Report

ADP published its best estimate today for March Nonfarm Payrolls, seeing a 201K net increase in private market jobs. The result was just slightly less than the revised February net addition of 208K jobs. ADP reports that the result was in line with consensus expectations for ADP's data and for the government's data, due on Friday. The pace of job increase was significantly better through the first quarter of 2011, versus the last quarter of 2010.

Challenger Announced Corporate Layoffs

After a spike up in February, Challenger, Gray & Christmas reported that Announced Corporate Layoffs fell 18% in March, to 41,528. First quarter job cuts, at 130,749, were the lowest measured since 1995. Job cuts were still much improved from the prior year period, down 39%. However, the public sector saw job cuts increase by 17%, as municipalities and federal government budget cutbacks force layoffs. That said, even government layoffs were down from a year ago, falling by 62%.

Mortgage Activity Eases

As rates moved back up on easing concerns about the Middle East and Japan, mortgage refinancing activity led overall mortgage activity lower. For the period ending March 25, the Market Composite Index of mortgage activity fell 7.5% on a seasonally adjusted basis. The Refinance Index dropped 10.1%, as contracted rates on fixed rate mortgages of 30-year and 15-year durations increased to 4.92% (from 4.8%) and 4.16% (from 4.02%), respectively. Purchase activity also eased, but by just 1.7% on a seasonally adjusted basis, as the spring buying season is getting underway.

Fed Men Support Completion of Quantitative Easing

Two Federal Reserve Bank Presidents, Boston's Eric Rosengren and Chicago's Charles Evans, voiced support for the full completion of the Fed's $600 billion quantitative easing program scheduled to last through June. The argument by some Fed men that the economy is on "firmer footing," and so might not need the full program, is coming into question of late, given new economic data and developments in the marketplace and global economy. The duo of Fed Presidents intimated that it was likely still too early to pull stimulus and that it appears the target figure of $600 billion is appropriate.

Obama Pushing Energy Today

President Obama is delivering a speech today to promote energy independence in the wake of disruptions abroad which highlight the vulnerability of supplies. The goal is to reduce oil imports by one-third over the next decade through the development of alternative fuels and energy. In a teaser last night, the President said, "Let's actually have a plan. Let's, yes, increase domestic oil production, but let's also invest in solar and wind and geothermal and bio-fuels and let's make our buildings more efficient and our cars more efficient."

Japan Might be Bigger Problem than Experts Suggest

Reports that the nuclear situation could drag out like the BP (NYSE: BP) oil spill did have many quick-to-speak market strategists looking foolish today. Japan's nuclear experts are now saying that it could take a substantial amount of time to stabilize Fukushima. As this catastrophe drags out, it weighs on the world's third largest economy. Uncertainty is a heavy weight for markets to bear, and it appears gurus were wrong in their overlooking what is a very complex and unique situation in Japan.

Portugal Says A-Okay for 2011

Despite bearing a downgrade by credit rating bully S&P on Tuesday, Portugal's Secretary of State for Treasury and Finance, Carlos Costa Pina, said Portugal is in position to meet its bond obligations for 2011, especially the redemptions of long-term debt that will take place in April and June. Costa Pina suggests his country will do all it can to avoid taking foreign aid, as it is viewed internally as a great burden on both public and private sector growth. Indeed, Greece also tried to avoid taking help, but the markets forced it to by pressuring its cost of borrowing beyond its ability. The recent government turnover only increased uncertainty in Portugal and pushed bond yields higher. The outlook is not a bright one for Portugal and so credit-rater S&P is probably right, but after the fact as is proving a trend on Water Street (i.e. US MBS).

Canada Contributes to Inflation Fears

Canada reported its industrial product and raw materials prices increased more than expected in February. The North reported that industrial product prices increased 0.7% in February, against expectations for a 0.3% increase. The gain followed a 0.4% rise in January and a 0.8% increase in December. Prices were up 3.4% year-to-year. The Raw Materials Price Index rose 1.8% in February, and was three times more than economists foresaw.

EIA Petroleum Status

With Saudi Arabia on its horse to make up for the supply disruption from Libya, oil inventory increased again by 2.9 million barrels in the latest week. However, for the period ending March 25, total motor gasoline inventory again dropped precipitously, by 2.7 million barrels this time. The Saudis are saying they will send more oil conducive to gasoline refining to make up for the loss of high quality oil usually delivered from Libya. Indeed, US interests are at stake in Libya, as the price of gasoline is growing intolerable to American consumers.

Corporate News Wire

Family Dollar (NYSE: FDO) reported a penny better quarterly EPS than analysts had forecast on average (even after their adjustment higher in early March), and FDO forecast annual income ahead of analysts' estimates. As a result, its shares are higher today, but down from their premarket scramble. Family Dollar sees full year EPS at $3.13 to $3.23, ahead of the analysts' consensus for $3.12.

Cephalon (Nasdaq: CEPH) is trading at a $75 and change today, above the $73 per share hostile takeover bid by Valeant Pharmaceuticals (NYSE: VRX), Canada's largest drugmaker. Valeant's bid marked a 24% premium to CEPH's closing price Tuesday. Valeant is an aggressive acquirer, and it looks like the market is anticipating Cephalon's playing hard to get might work in its shareholders' favor. Or, investors may be indicating the possibility of a bidding war. Otherwise, if the deal were accepted, CEPH's shares would be trading at a slight discount to the bid price.

Salesforce.com (NYSE: CRM) is adding a social media aspect through its acquisition of private firm Radian6, announced Wednesday. The deal, costing $326 million in cash and stock, is seen as an asset to the cloud software writer's clients ability to track customer trends on social media sites.

Japanese automakers Toyota (NYSE: TM), Honda (NYSE: HMC) and Nissan (Nasdaq: NSANY) are experiencing logistics issues tied to car parts deliveries from shutdown plants in Japan. Toyota has reportedly told its US dealers to stop ordering certain parts, for fear it will run out. Meanwhile, testing for radiation at foreign locations poses threat to further taint the Japanese automakers' brands and deliveries.

Wal-Mart (NYSE: WMT) is holding an international conference today for the investment community. The J.P. Morgan (NYSE: JPM) Global Protein Conference highlights a presentation by Tyson Foods (NYSE: TSN). The earnings schedule highlights reports from Acuity Brands (NYSE: AYI), American Electric Technologies (Nasdaq: AETI), Ameron International (NYSE: AMN), Andatee China Marine Fuel Services (Nasdaq: AMCF), Banks.com (AMEX: BNX), China Wind Systems (Nasdaq: CWS), Citadel Broadcasting (OTC: CDELB), Derma Sciences (Nasdaq: DSCI), Dreams (AMEX: DRJ), DryShips (Nasdaq: DRYS), Ediets Com (Nasdaq: DIET), Emergent (AMEX: LZR), EnergySolutions (NYSE: ES), Entremed (Nasdaq: ENMD), Ever-Glory (AMEX: EVK), Family Dollar (NYSE: FDO), Food Technology Services (Nasdaq: VIFL), General Maritime (NYSE: GMR), Global-Tech Advanced Innovation (Nasdaq: GAI), Gold Reserve (AMEX: GRZ), Gushan Environmental Energy (NYSE: GU), Innovaro (AMEX: INV), Jos. A. Banks (Nasdaq: JOSB), Lakes Entertainment (Nasdaq: LACO), Lindsay (NYSE: LNN), Merriman (Nasdaq: MERR), Mosaic (NYSE: MOS), Performance Tech (Nasdaq: PTIX), Signet Jewelers (NYSE: SIG), Unifirst (NYSE: UNF), UniTek Global (Nasdaq: UNTK), VCG Holding (Nasdaq: VCGH), Wireless Telecom (AMEX: WTT) and others.

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.

Consumers Souring on the Economy

Consumer Shock

Two separate consumer confidence measures offered a consistent message over the last several days. Consumers are souring on the economy. Global economic recovery, combined with the pressure applied from Middle Eastern unrest, has a difficult environment further burdened by rising gasoline and other prices.

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.

Relevant Tickers: NYSE: XRT, NYSE: WMT, NYSE: PIR, NYSE: ETH, Nasdaq: HOFT, NYSE: HD, NYSE: LOW, Nasdaq: AAPL, NYSE: BBY, NYSE: LTD, NYSE: CHS, NYSE: ANN, NYSE: GPS, NYSE: M, NYSE: JCP, NYSE: JWN, NYSE: TJX, NYSE: KSS, Nasdaq: COST, NYSE: TGT, NYSE: WMT, Nasdaq: WTSLA, Nasdaq: HOTT, NYSE: AEO, NYSE: ARO, NYSE: ANF, NYSE: SAK, NYSE: TIF, NYSE: TLB, NYSE: LL, Nasdaq: BLDR, NYSE: FO, NYSE: LEG, NYSE: TPX, NYSE: AYI, NYSE: LZB, Nasdaq: SCSS, NYSE: ZZ, NYSE: FBN, NYSE: NTZ, Nasdaq: SHLD, NYSE: DDS, Nasdaq: BONT, Nasdaq: CPWM, Nasdaq: BKRS, Nasdaq: BEBE, NYSE: BKE, Nasdaq: CACH, Nasdaq: CMRG, Nasdaq: CATO, NYSE: CBK, Nasdaq: CTRN, NYSE: PSS, Nasdaq: DEST, Nasdaq: DBRN, NYSE: DSW, Nasdaq: FINL, NYSE: FL, Nasdaq: GYMB, NYSE: GES, NYSE: JCG, NYSE: JNY, Nasdaq: JOSB, NYSE: NWY, NYSE: JWN, NYSE: MW, Nasdaq: SYMS, Nasdaq: PLCE, NYSE: DIA, NYSE: SPY, Nasdaq: QQQQ, NYSE: DOG, NYSE: SDS, NYSE: QLD, NYSE: NYX, NYSE: ICE, Nasdaq: NDAQ, NYSE: BAC, NYSE: GS, NYSE: MS, NYSE: JPM, NYSE: C, NYSE: WFC

Consumers Souring on the Economy

Both the University of Michigan/Reuters measure and the Conference Board's measure published on Tuesday concurred that inflation is the main concern of consumers today. It has them very worried about the affordability of gasoline and food and other goods over the months ahead. As higher necessary gasoline expenditures cut into pocket books, other spending is threatened as well.

The Conference Board's latest take for March showed its Consumer Confidence Index fell to 63.4, a notable decline from February's measurement of 72.0. The mark was the worst in three months in fact. As we have discussed here previously, most of the last year's gains in confidence have been counted in the expectations portion of the survey. The outlook of consumers had improved, surely benefiting from a rising stock market and positive economic data. We continue to be suspicious though of the reported gains in employment, and we've suggested the true unemployment rate is closer to 9.4% then 8.9%. Expectations, however, are easily spoiled, and vulnerable to swift change, as seen in the monthly collapse here.

Last week, Reuters/University of Michigan reported its Consumer Sentiment Index fell to 67.5, from 77.5 in February. That was the lowest reading for the index in more than a year. The expectations index here fell to 57.9, from 71.6 in February; this was the lowest level for consumer expectations since March 2009. The Conference Board's report issued today showed its consumer expectations measure fell to 81.1, from 97.5.

In both cases, the surveyed consumers indicated it was inflation concerns that bothered them most. Inflation expectations moved higher in each report, and the reason is clear, as gasoline has been highly pressured by the events in Libya, Bahrain and the Middle East and North Africa generally. However, even before the turnover of government in Egypt, commodity prices had been steepening. In fact, higher food prices were at the core of the unrest in Tunisia, since the impact is felt more sensitively by these third world nations, where food costs represent a greater proportion of income than in the U.S.

The Conference Board's report has not proven positive upon close inspection, even before today's news. While it has noted better relative results, on an absolute level, the survey displays a clearly miserable state of affairs. For instance, consumers claiming business conditions are "good" increased, but only to 15.1% of those surveyed. Those claiming business conditions were "bad" decreased, true, but only to 37.0%, from 39.3%. And some 44.6% of consumers said jobs are "hard to get", while just 4.4% said jobs were "plentiful".

Study of the numbers shows a pitiful confidence environment, that much is clear. Just 20.6% of consumers expect business conditions to improve over the next six months, and that is down from a still sad 25.2% last month. The numbers are not any better with regard to the jobs outlook or for income expectations. Representing 70% of the American economy, consumer spending is threatened, as is the housing recovery and GDP. Thus, concern is heightening about the possibility of another recession, and the likelihood of QE3 is increasing.

I noted Larry Kudlow Tuesday pointing to manufacturing strength and Jim Cramer spoke recently of the good health of the American multinational. Both statements are true. However, manufacturing alone will not survive the American economy, and the good health of American multinationals will neither support significant US job growth.

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), Bank of America (NYSE: BAC), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS), J.P. Morgan (NYSE: JPM), Citigroup (NYSE: C) and Wells Fargo (NYSE: WFC).

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.