Economy Watch: Hiring Surprisingly Strong in April
The U.S. Bureau of Labor Statistics report on hiring turned out better than expected; retailers reported strong sales in April; and a few commodities showed symptoms associated with bubbles popping.
By Dees Stribling, Contributing Editor
April was better than expected as far as the U.S. economy was concerned. The expected bad news could be summed up in one word: jobs. Or maybe three words: not enough hiring. But it turned out that employers were hiring at a fair clip.
The U.S. Bureau of Labor Statistics reported on Friday that payroll employment was up 244,000 in April., compared with 216,000 in March. Because many more people are now out looking for work–itself an encouraging sign–the official U.S. unemployment rate ticked up to 9 percent flat from 8.8 percent.
The good news for the labor market was a surprise because it came on the heels of a report on Thursday from the BLS that said that applications for jobless benefits spiked by 43,000 to 474,000 for the week ended April 30. That was the largest weekly increase since last summer. But then again, that seemed to be caused by some one-off events, such as auto plant shutdowns in the U.S. because of the disaster in Japan.
Retailers clean up in April
The other good news, especially considering that the U.S. economy depends so heavily on people going out (or staying home) and buying things, is that many retailers reported strong sales in April. Perhaps shoppers were inspired to spend by the relatively good weather, or maybe the fact that Easter was late this year. Whatever the reasons, same-store sales in April 2011 increased an average of 8.9 percent compared with April 2010 for the major chains that Thomson Reuters tracks, the largest uptick in more than a year.
Retailers such as Limited Brands Inc., Costco Wholesale Corp. and Macy’s Inc. all beat analysts’ expectations, some by quite a lot. Limited, for instance, the parent of Victoria’s Secret, saw a 20 percent same-store sales rise. Costco was up 12 percent, and Macy’s saw a 10.8 percent increase.
Remarkably, a number of teen-oriented clothiers–always a risky business, considering the fickleness of teen buyers–also did better than expected, such as Abercrombie & Fitch Co., Buckle Inc., Hot Topic Inc. and Zumiez Inc. Some teen retailers, however, didn’t fare so well, such as Aeropostale Inc. Even in a recovering economy, teens are still fickle.
Commodities: the bubbles pop?
Investors in commodities of various kinds seemed a mite nervous this week, with various selloffs and falling prices being the order of things, such as for oil, whose price was down 12 percent by the end of the week compared with the beginning. Turns out that there’s a little more “demand risk” for the Texas tea than previously thought. Also, the precious metal silver this week fell through the floor, experiencing its steepest weekly price decline since during the Ford administration, and gold took a hit, too, though not quite as much.
Is that the sound of a bubble or two popping? Maybe. In any case, the Standard & Poor’s GSCI index of 24 commodities dropped 6.5 percent on Thursday alone.
Wall Street was nervous as well on Thursday, anticipating weak jobs numbers that didn’t happen. The Dow Jones Industrial Average lost 139.41 points, or 1.1 percent, while the S&P 500 declined 0.91 percent and the Nasdaq dropped 0.48 percent.