Archive for October 11th, 2010

About the private sector job growth that Obama is touting …

October 11, 2010

The BLS reported that that private sector added 64,000 in September.

Point 1: ADP reported that the private sector cut 39,000 jobs in September … hmmm … one says up, one says down … wonder if the BLS chief got any ‘context’ from the White House ? … remember when the the CBO director got an invitation to the Oval Office when his healthcare numbers weren’t coming out right ?
http://blogs.abcnews.com/politicalpunch/2009/07/republicans-assail-president-obama-meeting-with-congressional-budget-office-director-as-inappropriat.html

Point 2: Accepting the BLS number and putting it into perspective: there are roughly 120 million folks employed in the private sector, so 64,000 represents about  1/20th of 1 percent … better than a negative number, and better than nothing … but not by much …it means that the private sector is adding jobs at the galloping rate of about 1/2% annually … nothing to brag about
(64,000 / 120,000,000 = 0.053% X 12 = .64%)

Point 3: The BLS reports a 9.6% unemployment rate … Gallup reports 10.1% … double hmmm

Ken’s Prediction: On the Friday after the election, the meager apparent jobs gain will be revised downward  and the unemployment rate will be revised up.  Just watch …

Posted in Employment - Jobs, Unemployment | Leave a Comment »

Dollar stores debate – thriving or hurting ?

October 11, 2010

Last week, we posted a seemingly innocuous excerpt from the NY Times about how dollar stores are thriving in the weak economy.

Got lightning fast feedback from a loyal Homa Files reader that an opinion to the contrary appeared in the WSJ:

Dollar stores have been all the rage in these penny-pinching times. But their growth prospects may be dimming.

The discount space is looking increasingly crowded. The three-biggest dollar stores, including Dollar Tree Inc., already have roughly a combined 20,000 locations in the U.S.

More troubling, the squeeze on dollar stores’ core, lower-end shoppers, is getting worse.

That is likely to put pressure on margins. Bargain prices on food, drinks and other “consumables” may get customers in the door, but discount retailers rely on higher-margin discretionary purchases for profit growth. Sales in the fiscal fourth quarter were strongest in the low-margin consumables category.

A weak economy mightn’t turn out to be quite the gold mine for dollar stores that many investors seem to think.

WSJ, Weak Economy Saps Dollar Stores’ Strength, Sept.  29, 2010
http://online.wsj.com/article/SB10001424052748704791004575520322560873584.html

Googling the topic revealed a debate in process on the topic.

Most notably, Jim Cramer – who has apparently been touting dollar stores on Mad Money – responded immediately to the WSJ story.  His verbatim comments:

“Never ever let a negative headline scare you out of the stock with a good long term story.

Case and point, last week the Wall Street Journal ran what may be the most absurd headline I’ve seen in ages, “Weak Economy Saps Dollar Stores’ Strength”.

I thought it was a comedy routine since Dollar Stores do well in a weak economy as a cash strapped consumer trades down the cheap stuff…..”

http://www.madmoneyrecap.com/madmoney_nightlyrecap_101006_3.htm

Ken’s Take: Dollar stores are either thriving or hurting … or just keeping pace … who the heck knows.

Thanks to RMM for feeding the lead

Posted in Retailing | Leave a Comment »