American Tourism, Employment Benefits from Weak Dollar

Foreign tourism boosts employment in the accommodation and leisure sector, thanks to a weak dollar. And don't miss our juicy Iran commentary either.

Employment Data Unfolds

Weekly Initial Jobless Claims came in higher than expected at 380K, but right around the recent range. The four-week moving average stands at 363,750, but the 35,000 claims increase this week over last was not enough to offset the even higher figures of the two weeks before. Are things improving?... not likely.

Home Depot (NYSE: HD) today announced it would close 15 stores and the Challenger Job-Cut Report posted a 19-month high. The report of planned layoffs reached 90,015 in April, up 68% from March. Things are getting worse folks, so buckle down. The insured unemployment rate increased to 2.3%, from 2.2% the week before. Tomorrow, the Labor Department will offer the overall unemployment rate, and Bloomberg's consensus of economists anticipates the rate will increase to 5.2%, from 5.1% last month.

Some contrasting data was offered by the Monster Employment Index, a measure of online job posting supply. The barometer improved to 174 in April from 167 in March. The new measure was still below last year's figure at the same time, which reached 186, and according to Monster Worldwide (Nasdaq: MNST), it benefited from seasonal hiring in the accommodation and food services industry. Also, despite media highlighting of big financial industry layoffs, the overall market is steadying according to Monster. The information from Challenger, Gray and Christmas disagrees, reporting that one in every four job cuts came from the financial sector in April.

Greek Wisdom

The Greek sees one possible and very logical explanation for the coinciding rise in financial sector job cuts and in financial sector job listings, and this is why you read Wall Street Greek. As you know, companies reduce cost by firing progressed employees and replacing them with young blood at much lower salary. There's probably a good deal of this going on now.

The figure also benefited from job demand in Texas and Florida, where were sure the energy industry and hospitality and leisure sector helped drive growth. Disney (NYSE: DIS), is probably going to benefit as much from increased tourism from overseas as it is hurt by decreased domestic affordability. Tourism in Europe is likely to decrease this year due to inflation and the rising cost of the euro, while American destinations see a rise in foreign visitors.

Personal Income and Outlays

Income rose 0.3% in March, in line with expectations, and consumption increased 0.4%, ahead of expectations. Great news?! No, sorry again. You see, the reason spending and income increased was due to inflation. Real PCE expenditures rose just 0.1%, while income decreased fractionally. Now it makes complete sense doesn't it.

ISM Manufacturing

April manufacturing was okay according to the popular press, despite contracting, which we remind you is a tell-tale symptom of recession. The April figure came in at 48.6, but because it was ahead of economists' forecasts for 48.0, all is well.... Let's celebrate. I'll make a celebratory feast for the two of us. We'll have potatoes and some tap water, but not just any tap water mind you. It'll be New York City tap water, with all the fringe benefits.

Oil Collapse

Oh me oh my! Oil is falling, oil is falling! It's all the way down to $111 a barrel. Soon we'll be driving our SUVs again! There seems to be some controversy about the strategic oil reserve. The Democrats have been aggressively pushing President Bush on the subject. Bush, however, is avoiding it, whispering, "shhh, Iran will hear you, you fool." You see, Israel is preparing to bomb Iran in the very near future, and with the bunker busting bombs we sold them a few years ago. Thus, we'll need all that strategic oil for the repercussions. Iran, my friends who may still be living in dream land and pretending the topic does not exist, will likely lash out at its neighbors, of which we remind you consists of a group including Kuwait, Iraq and Saudi Arabia. We're going to need all that oil once the Saudi energy logistics are destroyed by Iranian scud missiles and the Kuwaiti fields are afire. And, we'll also need it to annihilate the Iranian armed forces as a result. So, maybe don't be so quick to sell-off Exxon Mobil (NYSE: XOM), or perhaps energy firms with operations outside of the Middle East, like Encana (NYSE: ECA).

Please see our disclosure at the Wall Street Greek website. Article interests readers of (AMEX: DIA, AMEX: SPY, AMEX: QLD, AMEX: SDS, AMEX: DOG, Nasdaq: QQQQ, NYSE: XOM, NYSE: SUN, NYSE: HD, Nasdaq: MNST, NYSE: DIS)