Look Beyond Today’s Jobless Claims

Weekly Jobless Claims for the week ending May 5, 2012 hung around the same territory, as we wait for the next economic inflection point. The media offers promotional headlines to get you to read the story, and so today’s most popular theme seems to be that better claims have eased concern on labor. What’s true is that the last two weeks have been better. What’s troubling is that there’s no vision in these articles for the ramifications of what is developing in Europe and China.

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 include: 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)

Jobless Claims

The latest Weekly Jobless Claims Report showed a decrease of 1,000 new benefits filers to 367K, though that’s off a prior week figure that was revised higher by 3,000, to 368K. It’s mixed news that basically offers the same truth; not much changed last week.

The trend of the last four weeks is a more useful metric for vision into what’s developing in labor in most instances. It would be less important than the weekly figure should war break out in the Middle East, or looking back at history, when events like the attacks on the World Trade Center occurred. In today’s dynamic, though gradually changing environment, we can look to the moving average for guidance. What we see is that it’s down 5,250, reaching 379K in the latest reporting period. We should note that through the four-week period, it swung higher and then retrenched. Before that, the claims count had been trending lower to a sticking point approaching 350K.

The problem with claims is that it is a lagging indicator, though a current data point. We get a good look at what’s happening in real time, but it doesn’t mean much. For this reason, we have to look ahead to what may drive the trend to come. For that reason, I say, we’re waiting on the next inflection point. What seems to be developing is a gradual creep toward recession, with deterioration happening in slow motion.

Yet, as Europe deteriorates, China is likewise offering signs of slowing economic growth. Just today, China reported weaker than expected trade growth. This is but one of many recent data points souring for the emerging nation. This all plays back to America, because we serve and participate in those markets in a big way. They have offered support in our times of distress, and they have offered means of growth as our markets have matured. The deterioration has led me to suggest industrials and other multinationals might suffer looking forward. I even believe the high-flying growth offered to our best brands might come under pressure as these markets correct. This is why I said recently that I would not buy Starbucks (Nasdaq: SBUX), a market favorite high growth multinational play. Starbucks recently showed softness in its European market, and even McDonald’s (NYSE: MCD) just offered some concerning news about global conditions as it missed the Street’s April sales expectations.

Remember that with this weekly jobless claims data point, looking forward is the key. We can garner some information from the moving average and even the weekly count, but it’s what will happen that matters to stocks, which look ahead.

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.

Jobless Claims Troubling Trend

Weekly Initial Jobless Claims have been creeping higher ever since marking that now infamous “four-year record low” just a few weeks ago. We warned then, and we raise the decibel now, that we are seeing the effects of European recession hitting home on our already vulnerable economy. The result should be renewed caution in employment, which seems to be developing, and stalling consumer spending.

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 article tickers include Robert Half (NYSE: RHI), Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN), Monster Worldwide (NYSE: MWW), Apple (Nasdaq: AAPL), J.P. Morgan Chase (NYSE: JPM), Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Morgan Stanley (NYSE: MS).

Jobless Claims

Weekly Initial Jobless Claims actually slipped by 1,000 in the week ending April 21, falling to 388,000, but that was from a prior number that was revised higher (again), to 389,000, from 386,000. Economists were again surprisingly surprised by what we’ve been forecasting from before they were even giddy about nascent improvement in the labor market. The consensus view of economists was set at 375K for this week’s number, according to Bloomberg’s survey. We’ve noted in the past that economists understandably tend to have trouble seeing change on a weekly basis, and so historically, this forecast has tended to near mirror the latest preceding result.

The four-week moving average of jobless claims better reflects true trend, and that trend is troubling. The average increased by 6,250 in the latest measuring period, rising to 381,750. It’s been creeping higher since marking that infamous low that had the major television network world news teams proclaiming great change and reporting on where the jobs were. Of course, we noted that less firing does not necessarily translate into more hiring, and that played out two days later with the monthly Employment Situation Report letdown. Perhaps we have their attention now.

The report reached the wire today in tandem with mostly poor economic news flow save a suspect housing data point, yet stocks are still celebrating on an Apple (Nasdaq: AAPL) high driven by the economy defying earnings heights of the technology leader. Employment services firms are mixed on the data, with the shares of Robert Half (NYSE: RHI) and Manpower (NYSE: MAN) appropriately lower while Korn Ferry (NYSE: KFY) treads water and Monster Worldwide (NYSE: MWW) soars 10% on its own earnings news (at the hour of scribbling here).

The latest data from the Department of Labor (DOL) showed insured unemployment stuck at 2.6% in the week ending April 14 (note the lag in this data point). Meanwhile, the total number of people claiming benefits of some sort, including through the benefit extensions program, dropped by 87,160 toward reaching 6.68 million poor souls. We remind the inappropriately enthused that besides that being an excessive count, it also misses all those long-term unemployed who are simply running out of benefits and falling off the radar.

Indeed, the trend is a deteriorating one in employment, with the public sector setting up to renew its leadership in layoffs after a recent short break. Reportedly, the U.S. Army may be next on the federal scale, based on the comments of a Pentagon official and the reality of budget cut driven necessity. On the municipal level, Detroit was the latest to flirt with the idea of layoffs, with its mayor talking about the millions in savings he seeks through privatization of services and the firing of some 2,500 folks. San Diego and Los Angeles are likewise looking at laying off more city workers, and they’re not alone.

On the corporate front, Wall Street is reportedly set to set some bankers free due to the drying up of the deals market. The Wall Street Journal just reported that banks including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), J.P. Morgan Chase (NYSE: JPM) and Morgan Stanley (NYSE: MS) are getting ready for a new round of job cuts. The trouble should spread soon enough into the retail store marketplace and other service providers, before infecting manufacturing again if the global environment breaks as I see it (read poorly).

We’re just a week off now of the next Employment Situation Report, though perhaps still months short of when Europe really starts to impact our labor market due to the 20% of exports we ship there, its impact on the emerging world and the lag of the employment indicators. Stay tuned to our tiny little independent and insightful blog folks, as it’s getting hot in here…

This article should interest employment services firms like 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.

It's Jobsmageddon for the Chumps!

It’s Jobsmageddon! yelped the popular press Thursday when Weekly Initial Jobless Claims were reported. First of all, the change in claims was hardly notable. Secondly, followers of my column were not surprised with the nascent deterioration trend from that “four-year” low the floozy newsies reported just a couple weeks ago. It would seem the herd is catching up to us dear followers, so I hope your bets are in place. Calling, all bets! All bets to the table!

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.

Don't Panic but Place Your Bets

Weekly Initial Jobless Claims were reported at 386K for the week ending April 14. That was more than the consensus expectation for 365K, and the press got to howling. The thing is (the thing reporters do not know) - is that economists hardly make an effort in estimating the weekly claims count, and so the market mostly doesn’t notice the comparison. So smart money could give a damn about what really was just a 2,000 person decline week-to-week in jobless claims from the prior week’s revised count. Granted, the prior week was revised up to 388K from its initial reporting at 380K.

What’s really disturbing our counterparts in the economic debate is that the change in the four-week moving average for jobless claims increased again this week, rising by another 5,500 folks to settle at 374,750. However, settled it most likely is not. You see the trend in economic data, even before this week’s dysfunctional flow, has indicated poorly. Even before the latest reporting of Philadelphia and New York manufacturing malfunction, with each regional index showing a slowing in growth, we were reporting trouble in manufacturing. The Industrial Select Sector SPDR (NYSE: XLI) is off 2.5% since we authored that article.

Prior to this week’s declines in homebuilder sentiment, housing starts, and the pace of existing home sales, we were pounding on the front door against the sector. The SPDR S&P Homebuilders (NYSE: XHB) is off 6.6% from its 52-week peak through the 19th of April. With regard to the labor market, we were pointing out that the employment situation is just not well and would likely get worse despite its temporary fever break. The shares of employment services firms Robert Half (NYSE: RHI), Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN) and Monster Worldwide (NYSE: MWW) were all painted deep red Thursday.

As far as the consumer is concerned, we dissected the numbers and weren’t impressed. We showed you inconsistencies in auto sales data and the fine print behind hot builder supply sales. Thursday, the Consumer Discretionary Select Sector SPDR (NYSE: XLY) and the SPDR S&P Retail (NYSE: XRT) were each off near 1%. Generally, we’ve been warning for quite a while now that it seems the economy is creeping toward recession due to infection from Europe, and with an Iranian trigger cocked and a gun barrel up our throats. It seems the market is finally taking notice, with the latest several weeks’ strife reflected again in declines Thursday in the SPDR Dow Jones Industrial Average (NYSE: DIA), the SPDR S&P 500 (NYSE: SPY) and the PowerShares QQQ (Nasdaq: QQQ).

So forgive me for rolling my eyes and casting complaint as the media and market finally take notice of what I’ve been farting into the wind for weeks. Even though it stinks (the economy) I’ve recommended a few long-term ideas as an angle to deflect the darkness. We talked up five investments for a Mega Million Jackpot, including gold on a deep down day. The SPDR Gold Shares (NYSE: GLD) were in the green Thursday by the way. Also, we saw a catalyst driving a move in Chinese microcaps and, separately, we showed you two stories where value had been added through company specific events. Marley, my assistant editor and dear dog-friend just said, if he could, “What more can you do Pops?” All I can do is keep talking and hope you tell your friends about what you hear here. In the meantime, you had better hurry and get your bets to the table. Calling all bets? Calling all bets!

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.

The Labor Market is Not Well

Last Thursday, when the Weekly Jobless Claims data was reported, I was stunned by one major television network’s world news program’s reporting of job creation. They pointed to the relatively low new unemployment claim filings as a sign that jobs were being created. It was flawed, because new layoffs are not perfectly tied to new hiring. I find it karmic that just one day later, the monthly Employment Situation Report showed soft net job additions for the month of March. Indeed, the truth is, Main Street is not well. As a result, stocks generally, and the stocks of employment services firms Robert Half (NYSE: RHI), Korn Ferry (NYSE: KFY), Manpower (NYSE: MAN) and Monster World Wide (NYSE: MWW), continued their slide from last week again Monday.

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.

Labor Market

Last week offered a slew of employment data that provide us an opportunity to take good measure of the labor market. Most notably of all data points was of course the Employment Situation Report. March’s publishing showed that nonfarm private payrolls rose by 120,000 jobs on net, which was about half the prior three months’ average of +246K. Most importantly, that’s not really enough to keep the unemployment rate improving. It did improve, though, in March by a tenth of a percentage point, to 8.2%. However, that gain came on the unfortunate loss of 333K people from the labor force. You can fall out of the labor force for many reasons, like retirement for instance. However, I expect too many of America’s long-term unemployed have exhausted their extended weekly unemployment benefits, and are increasingly dropping off the radar.

Some 5.3 million Americans have been unemployed for more than 27 weeks, representing 42.5% of the total unemployed pool. The number of Americans working part-time for economic reasons, meaning they would prefer full-time jobs, decreased by 447K in March. I do not believe these part-timers got lucky and found full-time work; rather, I expect they are on the leading edge of layoffs and portend trouble for the economy. The 34,000 job shedding in the retail trade would seem to say the same thing.

The latest reporting of announced corporate layoffs by Challenger, Gray & Christmas indicated something else on the headline. According to the firm, planned layoffs dropped 27% in March, to a 10-month low of 37,880. The thing is, though, that the most important employers in America are small businesses; and their activities are harder to capture. Small business confidence has been on the rise in recent months, but has remained at historically low levels. The National Federation of Independent Business measure of the group is due on April 10.

March was also the lowest of the three months of the first quarter in terms of layoff announcements. The quarter itself, however, marked a 9.4% increase in announced firings versus the prior year period. Year-to-date data indicates the most weakness in consumer products, transportation and now call centers, which are clearly economically sensitive sectors. T-Mobile contributed a bunch to March call center contribution, as did Verizon Wireless (NYSE: VZ), Wells Fargo (NYSE: WFC) and QVC. An interesting contrast to 2011 and indicated by both reports, the public sector was less of a factor in March. Still, Challenger warns that significant cuts are likely at both the federal and local government levels this year.

In conclusion, I want to stress and reiterate that I believe the economic situation will deteriorate near-term, rather than improve as many believe. This forecast is what drives my jobs view, and what keeps me attuned to leading indicators. Recent economic data, including several reports from China and Europe, offer good reason for concern for the global economy to which we are tied. Indeed, recent expansionary efforts from China also point to an internal understanding of an important disruption. Government action, opening up markets for foreign investment, helped spur some excitement around Chinese firms of late, but the action was likely the result of trouble within. U.S. data around manufacturing, consumers and housing have all offered a suspect odor, and the stench of Europe threatens as well. Thus, I continue to favor investments with a long-term flavor, including the recently weakened gold as a hedge against trouble.

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.

Job Market Gains Look Tired

With almost any topic, one can take a positive view or negative, and that slant could be affected by the general opinion of the reviewer about that topic. Thursday’s Jobless Claims data, like most economic data, offers that same potential. The rate of jobless claims is still not optimal, but on a relative basis, it is certainly better than the last few years’ results. However, the pessimist, or maybe the realist who sees what’s developing in the global economy today, might say the latest lull in this data point, with claims stuck around the same rate, could indicate the latest improvement trend seen in the labor market is stalling. If that is the case, with the economy potentially stalling or recessing this year on various important factors, then we may have found another inflection point for labor, with a deterioration trend to follow.

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

Tiring Job Market

Weekly Initial Jobless Claims were reported at 351K in the week ending February 25, down only 2,000 from the prior week. Indeed, the four-week moving average reflects the stall in labor market gains, as it settled in close to the weekly count, at 354K. Several consecutive weeks of claims running at about this rate have had that effect, and the moving average improved 5,500 in the latest period. But is the latest activity indicative of a still improving labor market, or rather reflective of a stall in the rate of improvement? In the event of the latter, perhaps the claims data is telling us something about the economy, which seems to me likely to stall as well this year.

First of all, much of the gains in labor are suspect to begin with. In the past, we talked about the seasonal benefits. We have also discussed in detail the anomaly caused by the drop-off of the long-term unemployed who likely fall off the radar when their extended benefits expire. With the long-term unemployed representing a high percentage of total unemployment, this is likely playing an important role in the latest improvement trend in the unemployment rate, which was last measured at 8.3%. The number of Americans claiming benefits of some sort, including unemployment benefit extension payments, numbered approximately 7.5 million on February 11.

Still, the weekly initial jobless claims data do not include such noise. The data therefore offer an important and clear insight into today’s layoff activity, and some insight into the state of labor. With regard to this data point in particular, it’s clear now that there’s been some improvement in layoff activity. But, we cannot be so sure this is reflective of improved hiring patterns.

The Monster Employment Index (MEI) measures online job demand, and therefore offers some insight into hiring. The latest report covering January was partly tainted by a seasonal lull, but it offers useful insight anyway. While the MEI dropped to 133 in January, down from 140 in December and 147 in November, it was still 9% higher than last January’s 122 mark. Within the data, Monster Worldwide (NYSE: MWW) showed that the public sector continued to shed jobs, but it was the only area that showed contraction in January. Monster commented that transportation and warehousing, retail and wholesale have maintained strong growth trends. That said, the rate of improvement of job demand within manufacturing slowed, falling into the single digits for the first time since February 2011. One might argue that this could be on seasonal issues, as manufacturers shut down plants for maintenance at certain times during the year. But today’s ISM Manufacturing Index decline, and this week’s Durable Goods Orders drop-off seem to concur with what I interpreted from the Chicago Fed’s National Activity Index, which I believe foreshadows economic sluggishness if not recession. Finally, unless it’s a Renter Nation you’re interested in, then housing is not faring well either, despite the gains that I see shaky in homebuilders’ shares.

While relative employment stocks celebrated Thursday, the shares of employment services firms seem to confirm my view of the labor situation generally. The stocks are mostly higher since early October, but indicate a loss of confidence over recent weeks. For instance, looking at the charts of Robert Half International (NYSE: RHI), Korn Ferry (NYSE: KFY) and Kelly Services (Nasdaq: KELYA, Nasdaq: KELYB), we see that trend clearly. Kelly Services (Nasdaq: KELYA) is up 42% since October 3, 2011, but down roughly 14% from an intraday high of $18.05 in early February. Robert Half is also up about 42% since early October but down slightly from a recent high. Monster Worldwide (NYSE: MWW) breaks the industry trend (with a negative slant), but its shares seem to have diverted from the industry on alpha, or company specific driver.

A critical eye will be required as we receive the monthly labor reports next week. I would advise those inspecting the data to remember that labor is a lagging indicator. The latest developments in Europe, plus costly gasoline prices here at home due to an Iran issue that will not go away soon, weigh heavily on our vulnerable economy this year. As economic growth slows, so should labor activity, despite what the data may tell the optimist today.

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.

An Awkward Pause Before Further Labor

Last week, many rejoiced about the dip in Weekly Jobless Claims, which fell to 351K (revised from 348K), a level not reached in almost four years. The latest data, reported Thursday, showed the weekly count of unemployment benefit filers stuck at that same relatively low mark. Something is certainly afoot, given that the four-week moving average dropped as well, and for the sixth straight week. When the moving average coincides with the weekly data, we can no longer attribute the decline to passing factors like the Super Bowl skew or President’s Day. That said, I suggest the latest decline in jobless claims is a passing fad, an awkward pause, until renewed economic softness impedes what might have been real traction in our economy.

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.

Just an Awkward Pause

Jobless claims were unchanged in the period ending February 18, and the four-week moving average dropped by 7,000, to 359,000. The advanced seasonally adjusted insured unemployment rate was unchanged at 2.7% in the period ending February 11, after declining a tenth of a percentage point the week before. Finally, the total number of people claiming benefits in all programs, including the benefits extension program, fell by 178,619 in the period ending February 4, to 7.5 million. That might be wonderful news, except for the fact that many of our long-term unemployed are simply running out of benefits rather than finding new work.

Still, labor numbers have been improving across metrics, and some of those gains must be real. Unemployment was most recently reported improved for the month of January, falling to 8.3%. Indeed, even despite all the usual suspects that make the employment report suspect, some improvement is undeniable.

However, let us not forget that employment is usually a lagging indicator of economic conditions. My concern now is that the economy is turning for the worse, while employment is still gaining from previous economic strides and off extreme unemployment levels.

What we have to look forward to now is recession developing or already occurring in Europe, where 20% of American exports are sold. Meanwhile, even the Chinese economy looks to be softening, as its most important buyers are suffering. Some would say Europe is already affecting the American economy. Yet, even in Europe, it seems investors have not adequately discounted the scenario, with the iShares S&P Europe 350 Index (NYSE: IEV) up 15.7% since a December 19 trough. So why would we expect U.S. investors to give credence to our call? Well, because we see a few moves ahead, and because we’re patient. The SPDR Dow Jones Industrial Average (NYSE: DIA) is up 6.4% on the year through February 22, 2012.

American economic data has already begun to show signs of softening, with a wide variety of reports revealing the ugly economic truth. Housing data has missed expectations of late, leaving high flying housing stocks without support. Though even after dipping the last few days, the SPDR Series Trust Homebuilders (NYSE: XHB) is up 56% since its October 3, 2011 trough, after adjustment for dividends and splits.

Gasoline prices are on the rise due to escalating tensions with Iran, where war seems more likely to bust out than not today. Consumer spending must come under pressure as a result of this critical consumption factor’s drive higher. Yet the SPDR Select Sector Fund – Consumer Discretionary (NYSE: XLY) is 27% inflated since October 3, 2011. The retailers are noting mixed results, but in aggregate, they are disappointing forecasters. Followers of mine have been shorting them on the whole along with the homebuilders, and I expect will be rewarded for their early anticipation of the move. The SPDR S&P Retail ETF (NYSE: XRT) is 31% inflated since October 3, 2011.

Individual corporations are reporting mixed results, but disappointments at important economic drivers including Wal-Mart (NYSE: WMT), Ford (NYSE: F), Kohl’s (NYSE: KSS), Dell (Nasdaq: DELL), Amazon.com (Nasdaq: AMZN) and Sears (Nasdaq: SHLD) are notable. In such circumstances, as our vulnerable economy faces new and serious headwinds, it seems clear to me that wisdom favors an inevitable new stumble for the economy, followed by the lagging labor market.

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.

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.

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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.