From Bloomberg.com:
Restaurant sales contracted in June and July, even as spending on other discretionary categories such as automobiles and homes grew, a sign some Americans remain budget conscious.
This marked the first two consecutive declines in the monthly index of restaurant sales after the industry was rocked by its worst streak in almost three years between December and February.
Preliminary data suggest that August sales still are weak, though “better than July,” said Malcolm Knapp, a New York-based consultant who created the index and has monitored the industry since 1970. The summer slowdown is a symptom of a “reallocation nation,” in which people choose between different discretionary items to purchase each month, he said.
“Consumers’ priorities change every month based on what they can afford,” Knapp said. Many Americans don’t eat out as often as they would like, and they’ve had to cut back “very begrudgingly” on meals away from home to help subsidize other purchases....
Americans bought 5.39 million existing homes in July, up 17.2 percent from a year ago and the strongest month of demand since November 2009, according to data from the National Association of Realtors.
Cars and light-duty trucks sold at a 15.7 million seasonally adjusted annualized rate, keeping the U.S. on track for its best year since 2007, when 16.1 million vehicles were sold.
With “only so much income coming in,” many consumers had put off auto purchases for several years, said Rob Morgan, who oversees $1 billion as chief investment strategist in Exton, Pennsylvania, at Fulcrum Securities LLC. Now, a “forced replacement cycle” for cars on the road more than a decade is helping boost sales, he said.
Douglas Benn, chief financial officer of Cheesecake Factory, cited auto and home sales during a July 24 conference call as a reason why “consumers, at least temporarily, are cautious about spending their discretionary dollars” at restaurants...
The Bloomberg U.S. Full-Service Restaurant Index -- made up of 21 companies including Cheesecake Factory, Brinker, Bloomin’ Brands and Darden Restaurants Inc. (DRI) -- has lagged behind the Standard & Poor’s 500 Index by 4.5 percentage points since July 9. That followed about five months when these stocks led the broader market by about 20 percentage points.
Weaker demand at restaurants “speaks to the bifurcated nature of this recovery,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC....
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Link: http://www.bloomberg.com/news/2013-08-23/consumers-skip-dining-for-cars-as-sales-slow-ecopulse.html
Sunday, August 25, 2013
Sunday, August 18, 2013
Get a life! Facebook is bad for you
From The Economist:
Those who have resisted the urge to join Facebook will surely feel vindicated when they read the latest research.
A study just published by the Public Library of Science, conducted by Ethan Kross of the University of Michigan and Philippe Verduyn of Leuven University in Belgium, has shown that the more someone uses Facebook, the less satisfied he is with life.
Past investigations have found that using Facebook is associated with jealousy, social tension, isolation and depression. But these studies have all been “cross-sectional”—in other words, snapshots in time.
As such, they risk confusing correlation with causation: perhaps those who spend more time on social media are more prone to negative emotions in the first place. The study conducted by Dr Kross and Dr Verduyn is the first to follow Facebook users for an extended period, to track how their emotions change....
Dr Kross and Dr Verduyn therefore conclude that, rather than enhancing well-being, Facebook undermines it...
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Link: http://www.economist.com/news/science-and-technology/21583593-using-social-network-seems-make-people-more-miserable-get-life?
Those who have resisted the urge to join Facebook will surely feel vindicated when they read the latest research.
A study just published by the Public Library of Science, conducted by Ethan Kross of the University of Michigan and Philippe Verduyn of Leuven University in Belgium, has shown that the more someone uses Facebook, the less satisfied he is with life.
Past investigations have found that using Facebook is associated with jealousy, social tension, isolation and depression. But these studies have all been “cross-sectional”—in other words, snapshots in time.
As such, they risk confusing correlation with causation: perhaps those who spend more time on social media are more prone to negative emotions in the first place. The study conducted by Dr Kross and Dr Verduyn is the first to follow Facebook users for an extended period, to track how their emotions change....
Dr Kross and Dr Verduyn therefore conclude that, rather than enhancing well-being, Facebook undermines it...
----
Link: http://www.economist.com/news/science-and-technology/21583593-using-social-network-seems-make-people-more-miserable-get-life?
Sunday, August 11, 2013
WSJ: Teens Face Worst Labor Market (what has the Obama economy done for black teenagers?)
From the Wall Street Journal online:
12%: The share of the unemployed who are teenagers.
The entire working population has suffered from a slow jobs recovery, but no group has had a harder time than teenagers.
The unemployment rate for people 16 to 19 years old is 23.7%, compared to 7.2% for the population as a whole...
Teenagers make up less than 4% of the labor force, but 12%, or about one in eight, of the 11 million unemployed is between 16 and 19 years old.
Education is a major factor. The unemployment rate for those with a bachelor’s degree or higher is just 3.8%, but almost necessarily teenagers haven’t finished college. Workers without a high school diploma, even those over 25 who have more on-the-job experience, face an unemployment rate almost three times higher than university graduates.
One subset of teen workers has it even worse: African Americans. The unemployment rate for black 16 to 19-year-olds is a whopping 41.6%.
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Link: http://blogs.wsj.com/economics/2013/08/10/number-of-the-week-teens-face-worst-labor-market/?
12%: The share of the unemployed who are teenagers.
The entire working population has suffered from a slow jobs recovery, but no group has had a harder time than teenagers.
The unemployment rate for people 16 to 19 years old is 23.7%, compared to 7.2% for the population as a whole...
Teenagers make up less than 4% of the labor force, but 12%, or about one in eight, of the 11 million unemployed is between 16 and 19 years old.
Education is a major factor. The unemployment rate for those with a bachelor’s degree or higher is just 3.8%, but almost necessarily teenagers haven’t finished college. Workers without a high school diploma, even those over 25 who have more on-the-job experience, face an unemployment rate almost three times higher than university graduates.
One subset of teen workers has it even worse: African Americans. The unemployment rate for black 16 to 19-year-olds is a whopping 41.6%.
----
Link: http://blogs.wsj.com/economics/2013/08/10/number-of-the-week-teens-face-worst-labor-market/?
Wal-Mart's New Goal: Sell All the Beer
From Businessweek.com:
When Wal-Mart (WMT) began buying a greater number of locally grown fruits and vegetables in 2010, it made sure its efforts got plenty of publicity. But when Walmart decided it wanted to double its alcohol sales by 2016, it didn’t exactly issue a press release.
Customers noticed, and those in the alcohol industry—or, as Walmart prefers, the adult beverage business—certainly took note of the change.
“They’ve said they want to be the No. 1 beer seller in the world,” Cameron Smith, the president of an executive search firm that works closely with Walmart’s supplier network, told Bloomberg News.
“They’re getting there quick. Everyone in the supplier community is on cloud nine.”
So far, Walmart seems pretty pleased with the results...
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Link: http://www.businessweek.com/articles/2013-08-08/walmarts-new-goal-sell-all-the-beer#r=rss
When Wal-Mart (WMT) began buying a greater number of locally grown fruits and vegetables in 2010, it made sure its efforts got plenty of publicity. But when Walmart decided it wanted to double its alcohol sales by 2016, it didn’t exactly issue a press release.
Customers noticed, and those in the alcohol industry—or, as Walmart prefers, the adult beverage business—certainly took note of the change.
“They’ve said they want to be the No. 1 beer seller in the world,” Cameron Smith, the president of an executive search firm that works closely with Walmart’s supplier network, told Bloomberg News.
“They’re getting there quick. Everyone in the supplier community is on cloud nine.”
So far, Walmart seems pretty pleased with the results...
----
Link: http://www.businessweek.com/articles/2013-08-08/walmarts-new-goal-sell-all-the-beer#r=rss
Sunday, August 4, 2013
July's jobs bummer: Want fries with that?
From Fortune magazine online:
July's report on the state of America's job market, released Friday, marked the 34th month in a row in which the economy created jobs at a slow and steady clip. This is better news than very few or no jobs created at all, but it's best to judge by quality vs. quantity.
While the economy generated 162,000 jobs last month, the bulk of those jobs is neither highly paid nor full-time work.
This suggests why the economy isn't growing as fast as the pace of job creation...
To be sure, there are more low-wage jobs in the economy overall than there are high-wage jobs. Nonetheless, low-wage jobs have made up more of the recent job gains than usual. Retail, restaurant, and bar workers make up about 22% of the overall workforce. But in July, those categories accounted for over 52% of the job growth....
All this makes for a troubling trend, given that consumer spending drives the U.S. economy: Whereas the average weekly pay of U.S. workers overall is $824, leisure jobs pay $349 a week, while retail pays only slightly more at $520 a week.
Good jobs are much harder to come by these days: Take manufacturing, for instance. We often hear that U.S. manufacturing could turn the U.S. economy around. Manufacturing jobs that pay an average of nearly $1,000 a week added just 6,000 jobs in July.
The health care industry used to be the bright spot in an otherwise weak jobs market, but growth in that area is shrinking. So far, health care has added an average of 16,000 jobs a month, compared with an average monthly increase of 27,000 in 2012.
A not-so-great job is indeed better than no job, but is part-time work any better?
The number of people with part-time jobs who want to work full-time totaled 8.2 million in July, up slightly from the month before. And the number of people who landed part-time jobs in July was far larger than those who were hired as full-time workers, 170,000 vs. 90,000.
Part-time jobs generally offer less job security and few, if any, health and retirement benefits. And when workers aren't sure how much or where they might work tomorrow or next year, they're less likely to spend.
----
Link: http://finance.fortune.cnn.com/2013/08/02/jobs-report-july/
July's report on the state of America's job market, released Friday, marked the 34th month in a row in which the economy created jobs at a slow and steady clip. This is better news than very few or no jobs created at all, but it's best to judge by quality vs. quantity.
While the economy generated 162,000 jobs last month, the bulk of those jobs is neither highly paid nor full-time work.
This suggests why the economy isn't growing as fast as the pace of job creation...
To be sure, there are more low-wage jobs in the economy overall than there are high-wage jobs. Nonetheless, low-wage jobs have made up more of the recent job gains than usual. Retail, restaurant, and bar workers make up about 22% of the overall workforce. But in July, those categories accounted for over 52% of the job growth....
All this makes for a troubling trend, given that consumer spending drives the U.S. economy: Whereas the average weekly pay of U.S. workers overall is $824, leisure jobs pay $349 a week, while retail pays only slightly more at $520 a week.
Good jobs are much harder to come by these days: Take manufacturing, for instance. We often hear that U.S. manufacturing could turn the U.S. economy around. Manufacturing jobs that pay an average of nearly $1,000 a week added just 6,000 jobs in July.
The health care industry used to be the bright spot in an otherwise weak jobs market, but growth in that area is shrinking. So far, health care has added an average of 16,000 jobs a month, compared with an average monthly increase of 27,000 in 2012.
A not-so-great job is indeed better than no job, but is part-time work any better?
The number of people with part-time jobs who want to work full-time totaled 8.2 million in July, up slightly from the month before. And the number of people who landed part-time jobs in July was far larger than those who were hired as full-time workers, 170,000 vs. 90,000.
Part-time jobs generally offer less job security and few, if any, health and retirement benefits. And when workers aren't sure how much or where they might work tomorrow or next year, they're less likely to spend.
----
Link: http://finance.fortune.cnn.com/2013/08/02/jobs-report-july/
Saturday, August 3, 2013
WSJ: Low Pay Clouds Job Growth
From the Wall Street Journal online:
The U.S. labor market's long, slow recovery slowed further in July—and many of the jobs that were created were in low-wage industries.
... hiring was also weaker in May and June than initially reported. Moreover, more than half the job gains were in the restaurant and retail sectors, both of which pay well under $20 an hour on average.
"These jobs count as jobs in the jobs reports, but there's very little attention paid to the kind of jobs these are," said Arne Kalleberg, a sociology professor at the University of North Carolina and the author of the book "Good Jobs, Bad Jobs." "They tend to be low-wage jobs, they tend to be in retail and personal-service-type sectors, many of them are part time."
...the proliferation of low-wage jobs is leading to anemic growth in incomes. Average hourly wages were up by less than 2% in July from a year earlier, continuing a pattern of weak wage growth in the recovery. A broader measure of income released by the Commerce Department on Friday showed that inflation-adjusted incomes actually fell slightly in June...
Heidi Shierholz, an economist with the left-leaning Economic Policy Institute, said such trends are likely to continue as long as unemployment stays high and hiring remains weak.
"There's nothing putting upward pressure on wage growth," Ms. Shierholz said. "Your employer doesn't have to pay you big wage increases when they know you don't have outside options."
----
Link: http://online.wsj.com/article/SB10001424127887324635904578643654030630378.html
The U.S. labor market's long, slow recovery slowed further in July—and many of the jobs that were created were in low-wage industries.
... hiring was also weaker in May and June than initially reported. Moreover, more than half the job gains were in the restaurant and retail sectors, both of which pay well under $20 an hour on average.
"These jobs count as jobs in the jobs reports, but there's very little attention paid to the kind of jobs these are," said Arne Kalleberg, a sociology professor at the University of North Carolina and the author of the book "Good Jobs, Bad Jobs." "They tend to be low-wage jobs, they tend to be in retail and personal-service-type sectors, many of them are part time."
...the proliferation of low-wage jobs is leading to anemic growth in incomes. Average hourly wages were up by less than 2% in July from a year earlier, continuing a pattern of weak wage growth in the recovery. A broader measure of income released by the Commerce Department on Friday showed that inflation-adjusted incomes actually fell slightly in June...
Heidi Shierholz, an economist with the left-leaning Economic Policy Institute, said such trends are likely to continue as long as unemployment stays high and hiring remains weak.
"There's nothing putting upward pressure on wage growth," Ms. Shierholz said. "Your employer doesn't have to pay you big wage increases when they know you don't have outside options."
----
Link: http://online.wsj.com/article/SB10001424127887324635904578643654030630378.html
Friday, August 2, 2013
“We've Become a Nation of Hamburger Flippers”
From Yahoo Finance:
At 162,000, the July jobs report fell short of expectations and well shy of “whisper” numbers for payroll figures above 200,000.
In addition, job tallies were revised down for May and June...
69% of the jobs created in the second quarter – and 57% in the first half of 2013 – were in the three lowest-paying sectors of the economy: retail trade, administrative and waste services, and leisure and hospitality. These jobs, which account for 33% of all private sector jobs, pay an average of $15.80 per hour.
“What you’re seeing is now the spreading of low wage growth,” [Dan Alpert] says, noting those trends continued in Friday's July jobs report.
“Really we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.”
The growth of low-wage jobs helps explain why the majority of Americans continue to believe the economy is in recession, despite a falling unemployment rate – now down to a four-year low of 7.4% – a record-setting stock market rally and a rebound in the housing market.
Taking it a step further, Alpert says the low-wage trend also explains why GDP growth remains so weak despite monthly average private sector job growth of nearly 200,000 in the past year.
“The bottom line is a lot of people are coming off unemployment,” which works out to around $12 per hour if you include Food Stamps, he says. “So a $15 wage to work has no impact… you’re not increasing consumption or the ability [of workers] to go out and buy stuff."
As a result, the economy isn't getting the usual "second derivative" benefit of payroll growth whereby more people working leads to more economic activity and additional job creation, Alpert says.
"That’s why GDP and retail sales numbers are so lackluster.”
----
Link: http://finance.yahoo.com/blogs/daily-ticker/become-nation-hamburger-flippers-dan-alpert-breaks-down-145831220.html
At 162,000, the July jobs report fell short of expectations and well shy of “whisper” numbers for payroll figures above 200,000.
In addition, job tallies were revised down for May and June...
69% of the jobs created in the second quarter – and 57% in the first half of 2013 – were in the three lowest-paying sectors of the economy: retail trade, administrative and waste services, and leisure and hospitality. These jobs, which account for 33% of all private sector jobs, pay an average of $15.80 per hour.
“What you’re seeing is now the spreading of low wage growth,” [Dan Alpert] says, noting those trends continued in Friday's July jobs report.
“Really we have become a nation of hamburger flippers, Wal-Mart sales associates, barmaids, checkout people and other people working at very low wages.”
The growth of low-wage jobs helps explain why the majority of Americans continue to believe the economy is in recession, despite a falling unemployment rate – now down to a four-year low of 7.4% – a record-setting stock market rally and a rebound in the housing market.
Taking it a step further, Alpert says the low-wage trend also explains why GDP growth remains so weak despite monthly average private sector job growth of nearly 200,000 in the past year.
“The bottom line is a lot of people are coming off unemployment,” which works out to around $12 per hour if you include Food Stamps, he says. “So a $15 wage to work has no impact… you’re not increasing consumption or the ability [of workers] to go out and buy stuff."
As a result, the economy isn't getting the usual "second derivative" benefit of payroll growth whereby more people working leads to more economic activity and additional job creation, Alpert says.
"That’s why GDP and retail sales numbers are so lackluster.”
----
Link: http://finance.yahoo.com/blogs/daily-ticker/become-nation-hamburger-flippers-dan-alpert-breaks-down-145831220.html
We should be horrified at 1.7 percent GDP growth
From the Washington Post:
...we’ve now faced nine months of an expansion at a bit less than a 1 percent annual rate. Every two steps forward for growth seems to be accompanied by a step and a half back.
It would be one thing if that kind of slow growth was happening in a time of full employment, when the economy was basically sound. But with 7.6 percent unemployment, the nation could really use a few quarters in a row of 4, 5 or 6 percent growth to get us back to where people can really be pleased with the economy. It’s not an outlandish view; that’s exactly what happened in the early 1980s, in the aftermath of the last very deep recession....
Those of us who pore over government economic statistics have on some level become so accustomed to mediocrity in the U.S. recovery ... that we grade these economic reports on a curve.
... 1.7 percent growth isn’t good in the environment we’re in, even if it is a little better than economists thought the number would be. It isn’t even mediocre. It’s terrible. It’s a sign of the diminished economic expectations that economy-watchers have set for themselves that it’s anything to crow about at all.
----
Link: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/31/we-should-be-horrified-at-1-7-percent-gdp-growth/
...we’ve now faced nine months of an expansion at a bit less than a 1 percent annual rate. Every two steps forward for growth seems to be accompanied by a step and a half back.
It would be one thing if that kind of slow growth was happening in a time of full employment, when the economy was basically sound. But with 7.6 percent unemployment, the nation could really use a few quarters in a row of 4, 5 or 6 percent growth to get us back to where people can really be pleased with the economy. It’s not an outlandish view; that’s exactly what happened in the early 1980s, in the aftermath of the last very deep recession....
Those of us who pore over government economic statistics have on some level become so accustomed to mediocrity in the U.S. recovery ... that we grade these economic reports on a curve.
... 1.7 percent growth isn’t good in the environment we’re in, even if it is a little better than economists thought the number would be. It isn’t even mediocre. It’s terrible. It’s a sign of the diminished economic expectations that economy-watchers have set for themselves that it’s anything to crow about at all.
----
Link: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/31/we-should-be-horrified-at-1-7-percent-gdp-growth/
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