Business Summary 03-04-10

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Business Summary

Today's business summary covers two key employment data points, factory orders, productivity & costs, chain store sales and more. We covered the jobless claims data in our earlier article entitled, "Unemployment Claims Miss Many", so just click through.

Monster Employment Index

Leading our business summary today is Monster World Wide (NYSE: MWW), which publishes its Monster Employment Index (MEI) monthly. The MEI measures online job demand. Seasonality played a role, says Monster, in the index's jump up in February to 124, versus a reading of just 114 in January. Indeed, when compared to the prior year period, the MEI improved 2 points. Monster says this is evidence of overall labor market progress, but a 1.6% gain is nothing to bank on.

Still, we can take some pleasure in the knowledge that all 28 major metropolitan markets measured by Monster improved in February. Also, job availability improved in 15 of 20 industry sectors and 19 of 23 occupational categories.

Productivity & Costs

Fourth quarter productivity was revised higher, now showing an annualized increase of 6.9%, versus the initially reported 6.2% rate. As a result of a 7.6% increase in output on only a 0.6% increase in hours worked, the Unit Labor Costs of the nonfarm businesses measured fell 5.9%. Naive assumption attributes union labor cost to lower wages or decreased workforce, however, it is simply the result of increased demand and shipments on a fixed labor force. Therefore, it is directly tied or resultant from the increase in output. While this may not always be the case for costs, it is when coming out of economic trough, where idle capacity exists.

Factory Orders

Orders for manufactured goods grew 1.7% in January (1.5% in December), versus economists expectations for a rise of 2.0%, according to Bloomberg. New orders are now up nine of the last ten months, another positive economic sign. However, when excluding transportation, orders only edged up 0.1%. Transportation Orders actually increased 15%, driven by a 118.6% increase in Nondefense Aircraft & Parts and a 61% increase in Ships & Boats. Defense Aircraft and Parts rose 11.6%. Due to the volatile impact these high-ticket industries have, transportation is weeded out of the figure. So, even though we cannot be too excited by the ex-transportation result, we must also note that Nondurable Goods Orders rose 0.9%, which is somewhat enthusing.

Pending Home Sales

Your business summary notes that Pending Home Sales were reported today for the month of January. Activity dropped off 7.6%, and was attributed to weather. In an article authored here not too long ago entitled "Existing Home Sales Sank in January 2010," we said "Still, these "existing home dealings" mark the closing of sales, whereas "Pending Home Sales" would better reflect weather related impact now, as people are not getting out to sign into contracts and to see homes."

While contract signings sank 8.7% in the Northeast and 8.9% in the Midwest, they only declined 2.1% in the South. Okay, so that makes sense, but why did activity fall off 13.2% in the West then? I guess that depends on how much of the "West" California encompasses; so now it makes sense, as weather likely impacts the broader West. Real estate investors remain hopeful that the approaching deadline for the First-Time Homebuyers Tax Credit will spur some traffic, but the question remains - what happens afterwards?

Chain Store Sales

Retailers reported same-store sales for the month of February today, and your business summary has it covered. Strong relative sales growth of 3.7% (by ICSC; Thomson Reuters +4%) surprised analysts, as gains were the norm across stores. The reason why though is because last February was simply lousy. Given also the fact that February is the second least important month of the year for retailers, and we have little reason to raise the victory flag. You'll recall that last February was about as dire as things got, and you couldn't get a dollar out of a do-gooder. That said, here are some of the numbers for you:

Costco (Nasdaq: COST): +9%
BJ's Wholesale (NYSE: BJ): +7.5%
Target (NYSE: TGT): +2.4%
J.C. Penney (NYSE: JCP): +1.2%
Macy's (NYSE: M): +3.7%
Nordstrom (NYSE: JWN): +10.3%
Zumiez (Nasdaq: ZUMZ): +11.2%
Hot Topic (Nasdaq: HOTT): -7%
Abercrombie & Fitch (NYSE: ANF): +5%
Aeropostale (NYSE: ARO): +7%
American Eagle Outfitters (NYSE: AEO): +6%
The Buckle (NYSE: BKE): +5.1%
Cato Corp. (NYSE: CATO): +3%
The Gap (NYSE: GPS): +3%
Limited Brands (NYSE: LTD): +10%
Ross Stores (Nasdaq: ROST): +11%
TJX (NYSE: TJX): +10%

Wal-Mart (NYSE: WMT) does not report monthly sales.

Thursday's business summary includes EPS reports from AmBev (NYSE: ABV), Angiotech (Nasdaq: ANPI), ArcSight (Nasdaq: ARST), ATP Oil & Gas (Nasdaq: ATPG), Costco (Nasdaq: COST), Del Monte Foods (NYSE: DLM), Depomed (Nasdaq: DEPO), Emergent Biosolutions (NYSE: EBS), Energias de Portugal (OTC: EDPFY), Equity One (NYSE: EQY), Genesco (NYSE: GCO), Hemispherx BioPharma (AMEX: HEB), Interval Leisure (Nasdaq: IILG), Mentor Graphics (Nasdaq: MENT), Move, Inc. (Nasdaq: MOVE), Nash Finch (Nasdaq: NAFC), Omeros (Nasdaq: OMER), PC-Tel (Nasdaq: PCTI), Ritchie Bros. Auctioneers (NYSE: RBA), S1 Corp. (Nasdaq: SONE), Silver Standard Resources (Nasdaq: SSRI), Solarfun Power Holdings (Nasdaq: SOLF), Steinway Musical Instruments (NYSE: LVB), Suez SA (NYSE: SZE), Suntech Power (NYSE: STP), The Cooper Cos. (NYSE: COO), Toronto Dominion Bank (NYSE: TD), U.S. Physical Therapy (Nasdaq: USPH), URS Corp. (NYSE: URS), Wendy's (NYSE: WEN), West Marine (Nasdaq: WMAR), Western Refining (NYSE: WNR) and Winthrop Realty Trust (NYSE: FUR).


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