Service sector grows in January, employment speeds up: ISM

NEW YORK, Tue Feb 5, 2013 — The U.S. services sector expanded in January although the pace slowed slightly from the previous month, with robust jobs growth offsetting slowness in new orders, according to a report released on Tuesday.

The Institute for Supply Management said its services sector index eased slightly to 55.2 last month from 55.7 in December. The reading was in line with economists’ forecasts, according to a Reuters survey.

The employment sub-index was at its highest since February 2006, rising to 57.5 in January from 55.3 in December.

A reading above 50 indicates expansion in the sector, while one below 50 indicates contraction. The index was last below 50 in December 2009 as the U.S. economy was beginning to recover from the financial crisis and recession.

Consumers boost growth despite business caution

WASHINGTON, Fri Oct 26, 2012 – Economic growth picked up in the third quarter as a late burst in consumer spending offset the first cutbacks in investment in more than a year by cautious businesses.

Gross domestic product expanded at a 2 percent annual rate, the Commerce Department said on Friday, accelerating from the second quarter’s 1.3 percent pace.

Still, the stronger pace of expansion fell short of what is needed to make much of a dent in unemployment, and details of the report did not bode well for an acceleration in output in the fourth quarter, as a spurt in government spending was see as temporary.

A growth pace in excess of 2.5 percent is needed over several quarters to make substantial headway cutting the jobless rate. Economists polled by Reuters had expected a 1.9 percent growth pace in the third quarter.

The report offers little cheer for the White House ahead of the closely contested Nov. 6 presidential election, in which President Barack Obama is trying to fend off Republican challenger Mitt Romney.

U.S. stock index futures pared losses after the data, while Treasuries briefly cut early price gains. The dollar trimmed losses against the yen, and cut gains against the euro.

Since climbing out of the 2007-09 recession, the economy has faced a series of headwinds from high gasoline prices to the debt turmoil in Europe and, lately, fears of U.S. government austerity.

Mondelez International happy with holdings but could add on

NEW YORK, Wed Oct 3, 2012 – Mondelez International Inc. CEO Irene Rosenfeld is happy with her new company’s current portfolio, but told Reuters on Wednesday that there could be opportunities to add to it.

Speaking in New York on the company’s second day of trading as a stand-alone snacks company, Rosenfeld said most of the company’s growth moving forward will therefore be organic.

The company derives 44 percent of its $36 billion in revenue from developing markets, with a strong presence in Brazil, Russia, India and China.

“We see a real opportunity, as we now become a more focused global snacking player, to start to invest more aggressively in the next wave of markets,” Rosenfeld said, citing the Middle East, Africa and Indonesia. “We see accelerated growth potential as a standalone company.”

Mondelez shares were down slightly at $28.00 on the Nasdaq in late morning trading.

Wal-Mart international growth slows, shares fall

BENTONVILLE, Ark., Fri Aug 17, 2012 – Wal-Mart Stores Inc.’s full-year profit may miss analysts’ expectations as growth slows in its international markets, pressuring the company even as its U.S. discount stores continue to prosper.

The world’s largest retailer, viewed as a barometer of economic activity, said on Thursday its cash-strapped customers tend to spend more at the beginning of the month when they get their paychecks. That “paycheck cycle” has extended its reach to the company’s markets beyond the United States.

“It became more pronounced across the globe,” CFO Charles Holley told reporters, without naming any specific markets where he sees the shift.

Wal-Mart’s higher second-quarter profit narrowly beat the average estimate of analysts polled by Reuters. While the company raised its earnings outlook for the full year, that could still miss analysts’ expectations.

Wal-Mart shares were down 3.4 percent at $71.91, erasing recent gains, and were the worst performer in the Dow Jones industrial average in afternoon trading.

In the United States, Wal-Mart’s largest market, shoppers’ top concerns are employment, gas prices and higher food costs, Holley said.

Other retailers, too, added to concerns about the plight of lower-income U.S. consumers.

Dollar Tree Inc. forecast quarterly earnings below Wall Street estimates on Thursday. And Sears Holdings Corp. said U.S. same-store sales fell 4.7 percent at the Kmart discount chain.

Still, Wal-Mart plans to open more stores and expects growth across its regions, but, as it has said earlier this year, will slow down store openings in Brazil, China and Mexico.

In Brazil and China, where it has hundreds of stores, it wants to “let them catch their breath” and work on moving to everyday low pricing and improving profitability, Holley said.

At the same time, the store approval process in Mexico has slowed and become more complex in the wake of allegations the company had bribed government officials to speed up approvals.

Retail sales in July point to rebound in consumer spending

WASHINGTON, Tue Aug 14, 2012– Retail sales rose in July for the first time in four months as demand rose broadly for everything from cars to electronics, a sign that consumers could drive faster economic growth in the third quarter.

Retail sales rose 0.8 percent last month, the Commerce Department said on Tuesday.

It was the biggest gain since February and well above analysts’ expectations. Economists polled by Reuters had expected retail sales to rise 0.3 percent.

The report bolsters the view that the slowdown in economic growth during the second quarter will prove temporary.

It also offers some relief for President Barack Obama, whose November re-election bid has been imperiled by a weak jobs market. Republican challenger Mitt Romney is focusing his campaign on the weak economy that has plagued Obama’s presidency.

The report could also splash a bit of water on hopes the Federal Reserve could soon launch another bond-buying program to help the economy.

Job creation in the United States slowed dramatically in the second quarter as consumer spending cooled and economic growth slowed. Job creation accelerated in July although the unemployment rate still rose to 8.3 percent.

Pointing to a strong increase in consumer spending during July, the so-called core measure of retail sales – which excludes autos, gasoline and building materials – rose 0.9 percent. That was the biggest gain since January.

Kimberly-Clark, Colgate results show resilience

NEW YORK, Thu Jul 26, 2012 – Results from Kimberly-Clark Corp. and Colgate-Palmolive Co. on Thursday showed household goods makers are nimbly going after growth, with their outlooks somewhat positive about the rest of the year despite economic concerns.
Kimberly-Clark, known for its Kleenex tissues and Huggies disposable diapers, is also seeing relief in key commodity expenses as pulp costs should be somewhat lower than it previously expected.
The company Clark reported quarterly profit that beat expectations and raised its 2012 forecast, while Colgate’s earnings were in line with estimates and it held to its earlier forecast.
Both companies are increasing advertising spending to entice consumers with new products, such as Kimberly-Clark’s Depend and Poise pads for female incontinence, and Colgate’s Colgate Optic White toothpaste.
“I’m encouraged by our execution in a continued volatile environment,” said Kimberly-Clark Chief Executive Thomas Falk.
Kimberly-Clark shares rose 1.1 percent to $84.28, while Colgate jumped 4 percent to $106.31.

Private sector adds 133,000 jobs in May: ADP

NEW YORK, Thu May 31, 2012 – The pace of hiring at companies picked up in May, though the 133,000 jobs created this month came in shy of analysts’ expectations, data from a payrolls processor showed on Thursday.

Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 148,000 jobs. April’s figure was revised down slightly to an increase of 113,000 from the previously reported 119,000.

The report is jointly developed with Macroeconomic Advisers LLC.

“Recent data hasn’t been great, and while this isn’t a horrible number, it shows we’re in a lackluster period in the economy right now,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.

Stock index futures trimmed gains immediately after the data, while the dollar held losses against the euro and yen.

The ADP figures come ahead of the government’s much more comprehensive labor market report on Friday, which includes both public and private sector employment.

Industrial output in April rises most in over a year

WASHINGTON, Wed May 16, 2012 – Industrial production posted its fastest growth in over a year in April, boosted by surging output at utilities and a rebound in manufacturing, the Federal Reserve said on Wednesday.

Industrial output grew 1.1 percent last month, the most since December 2010 and nearly twice the pace expected by analysts polled by Reuters.

The Fed also revised its estimates for prior months, saying production contracted 0.6 percent in March and expanded 0.4 percent in February. The Fed previously said production was flat in February and March.

In April, manufacturing output rose 0.6 percent, bouncing back from a 0.5 percent decline in March. A big increase in vehicle production factored in the gains, with output for motor vehicles and parts up 3.9 percent.

Still, the advance in factory output was broad based. Outside vehicles and parts, manufacturing increased 0.3 percent.

Utilities output increased 4.5 percent. Unseasonably warm weather in the first quarter previously had held down demand for heating, the Fed said.

Capacity utilization, a measure of how fully firms are using their resources, rose to 79.2 percent, the highest since April 2008.

Officials at the Fed tend to look at utilization measures as a signal of how much “slack” remains in the economy – how far growth has room to run before it becomes inflationary.

Wholesale inventories data points to first quarter GDP downgrade

WASHINGTON, Wed May 9, 2012 – Stocks of unsold goods at wholesalers rose modestly in March, according to government data on Wednesday that suggested a downward revision to the initial first-quarter growth estimate.

Wholesale inventories increased 0.3 percent to a record $480.4 billion, the Commerce Department said, after an unrevised 0.9 percent rise in February.

The increase was half what economists polled by Reuters had expected, leaving them to conclude that the government would likely lower its first-quarter GDP estimate to an annual pace of 1.9 percent from the 2.2 percent rate it reported last month.

The change in inventories is a key component in the calculation of GDP. However, the actual size of the revision would be depend on data next week on overall business inventories for March.

Trade data for March to be released on Thursday will also have an impact on the first-quarter GDP estimate. The government used estimates for both business inventories and the trade balance for its first GDP estimate, published last month.

Economists said the wholesale numbers, particularly the ex-autos component that goes into the GDP calculation, had come in softer than the government’s assumptions.

Lockheed eyes growth amid ‘increasing headwinds’

WASHINGTON,| Thu Apr 26, 2012 – Lockheed CEO Bob Stevens and his successor, Chris Kubasik, who will move into the CEO job in January, told a news conference:

- that the company is focused on growth despite “increasing headwinds” in the defense sector

- that Lockheed has begun making contingency plans in case U.S. lawmakers are not able to reverse $500 billion in additional defense cuts due to take effect in January under “sequestration,” but it was premature to give any details

- Kubasik said he did not expect “a whole lot of change” in the company’s strategy when he takes over as CEO

- Stevens said he was disappointed that union workers at the company’s Fort Worth plant and several test sites had rejected the company’s officer, but the company was focused on keeping the program on track

- that salaried employees switched to the pension plan now being offered to union workers six years ago

- Kubasik said he envisioned international sales growing to account for 20 percent of revenues in coming years, up from 17 percent now.