Its been a while since we’ve highlighted the musings of Barron’s Alan Abelson:
"AS INTIMATED, the employment report for December released Friday morning by the Bureau of Labor Statistics was something less than a barn-burner. Instead of the 200,000 additions to payrolls the seers on the Street had anticipated, there were 108,000. That’s rather a bad miss, in our bloodshot view, but it was pretty much shrugged off as a peccadillo by various and sundry commentators (most of whom happened to be among those forecasting 200,000). We’re glad they’re not doing something important like working the registers at a supermarket checkout counter.
Some of the wrong guessers noted that November’s gain had been revised upward to 305,000, from the originally reported 215,000, as if that somehow off- set their woeful December miscalculation. No mention that perhaps November was artificially inflated by a post-Katrina lift. In any case, last month’s job total was, in a word, punk.
Or, as Philippa Dunne and Doug Henwood, the dynamic duo who run the Liscio Report and whose deft dissections of the employment figures we’ve had the pleasure of featuring in this sacred space more than once, put it: The gain of 108,000 jobs "was a disappointment by any standard (and not much larger than the survey’s margin of error)." While, as they point out, private services added 82,000 jobs, "few sectors really stood out as leaders" except for bars and restaurants, "which have been the source of 11% of all the job gains over the last year." That begs for comment, but all that occurs to us is the lugubrious thought that more and more people must feel the need to drown their sorrows, occasioned –who knows? — by an inability to find a better job or the worry of losing the one they have.
Health care once again was a job-generator, accounting for 21,000 payroll additions. Our suspicion is that these mostly are not very high-paying slots, but, in any case, as Philippa and Doug wryly observe, "this sector’s gains are not necessarily good news for the rest of the economy."
Average weekly hours worked slipped 0.1%, and average hourly earnings were up a modest 0.1%. As our perceptive pair observes, "on a yearly basis, earnings gains are still lagging inflation. If the labor market were really as tight as some claim, wouldn’t we be seeing stronger wage gains?"
Unemployment was off a tick, to 4.9%, but that largely reflected a shrinkage of the labor force. Had those labor-force dropouts been added to the unemployed, reckon Philippa and Doug, the unemployment rate would have risen to 5.1%.
All in all, they sum up, "the labor market continues to underperform." Pure and simple.
Well said . . .
The Vulture’s Song
UP AND DOWN WALL STREET
Barron’s, MONDAY, JANUARY 9, 2006
Back on December 1, I mentioned that "Holiday sales increases can be in the 3 to 4% range." This modestly Bullish call was at the very low end of Wall Street projections.
The prime motivation for that range was the decreasing gasoline prices post Katrina, and the love affair with Plasma Screen TVs (that was the good news). Keeping the Bullishness modest was the negative real income for the middle class; on the other end, the increasing take home pay for the ultra wealthy supported the relative strength of the luxury retailer.
The WSJ reports that "overall, Retail Sales rose 3.2%." And, the big winners were the luxury stores. Its a pleasant surprise anytime projections like this end up that accurate.
I also wish to remind you (again) how the silly NRF projection of 22% was; Their absurdity was a statistical abomination (and they were chastised in this space for it)
Here’s the Journal’s summary:
Holiday shoppers spent big on a few products last month, but held out for last-minute deals, resulting in mixed performances from U.S. retailers. Cash registers rang at luxury retailers and teen specialty shops, but sales at Wal-Mart Stores Inc. disappointed.
Overall, sales at stores open at least a year, a measure known as same-store sales, rose 3.2% in December from a year earlier, according to an index of 66 chains compiled by the International Council of Shopping Centers. The trade group, based in New York, had expected same-stores sales growth between 3% and 3.5%. According to the tally, same-store sales at luxury stores grew 6.4%, while discounters ticked up just 2.6%.
"All combined it was good, not great," said Jeff Klinefelter, senior research analyst at Piper Jaffray. "When we finally got the last-minute rush, it was the higher-end consumer that followed through with spending."
Luxury Stores Were Holidays’ Stars
Overall Retail Sales Rose 3.2%, Slowed by Discounters; Holdout Shoppers Also Hurt
THE WALL STREET JOURNAL,January 6, 2006; Page A2
Mixed Stockings for Retailers
See the WSJ’s retailer chart here: