Attention, Shoppers: Store Is Tracking Your Cell

Like dozens of other brick-and-mortar retailers, Nordstrom wanted to learn more about its customers — how many came through the doors, how many were repeat visitors — the kind of information that e-commerce sites like Amazon have in spades. So last fall the company started testing new technology that allowed it to track customers’ movements by following the Wi-Fi signals from their smartphones.

But when Nordstrom posted a sign telling customers it was tracking them, shoppers were unnerved.

“We did hear some complaints,” said Tara Darrow, a spokeswoman for the store. Nordstrom ended the experiment in May, she said, in part because of the comments.

Nordstrom’s experiment is part of a movement by retailers to gather data about in-store shoppers’ behavior and moods, using video surveillance and signals from their cellphones and apps to learn information as varied as their sex, how many minutes they spend in the candy aisle and how long they look at merchandise before buying it. Read more >>

Strongest employment growth is temporary help agencies

Unemployment in May ticked up to 7.6 percent as employers added 175,000 jobs, a tepid report that may cheer investors hoping for interest rates to stay low, boosting stocks.

Economists including JJ Kinahan, chief derivatives strategist of TDAmeritrade, had expected the addition of 167,000 jobs with the unemployment rate unchanged at 7.5 percent.

The industries with the strongest employment growth in the last month were temporary help agencies, which added 26,000 jobs; and food services, which added 38,000 jobs in May and 337,000 over the past year.

...The Labor Department revised the number of jobs added in April lower to 149,000 from 165,000. March's number was revised higher to 142,000 from 138,000. Read more >>

Companies Spending Cash on Investors, Not Workers

Companies flush with cash remain reluctant to hire or make capital purchases, choosing to reward investors rather than expand their businesses.

Recent economic data exemplify the trend: Private payrolls grew by just 135,000 during May, according to ADP, while employment components both for the Institute of Supply Management's manufacturing and nonmanufacturing indexes show a flat jobs outlook.

The grim hiring prospects come as nonfinancial firms hold nearly $1.8 trillion in cash on their balance sheets. Rather than look to expand, though, they've chosen to participate in aggressive share buybacks and dividend increases to reward investors.

According to TrimTabs, companies have spent $290.7 billion this year on buybacks, which are aimed at decreasing the amount of available shares—or float—thus driving up stock prices. That effort, at least, has been a success. Read more >>

Greek unemployment rises to 23.1 percent in May

Source
Greece's statistical agency says unemployment in the crisis-struck country has risen to a startling 23.1 percent in May — up from 16.8 percent a year earlier. An agency statement Thursday said the worst affected group is young people under 25, where 54.9 percent are out of work.

A total 1.15 million people were unemployed in May 2012, compared to 1.1 million in April, or 22.6 percent of the workforce. In May 2009, months before Greece's crisis broke, unemployment was just 9.1 percent.

Greece has avoided going bankrupt by international rescue loans. In return, Athens imposed harsh austerity measures to limit runaway government overspending and improve chronically weak tax revenues.
The coalition government is now striving to identify €11.5 billion worth of cuts for 2013-14.

Consumer Spending Stalls, Morale at 6-Month Low

Reuters
Consumer spending growth ground to a halt in May as auto purchases flagged, while confidence ebbed to a six-month low in June, the latest signs of trouble for the economy. Although manufacturing activity in the Midwest picked up this month, it offered little cheer for an economic recovery that has been hit by turbulence from the debt crisis in Europe and a lack of clarity on the course of fiscal policy at home.

"We are at a stall speed expansion here," said Tim Quinlan, an economist at Wells Fargo in Charlotte, North Carolina. "We have a consumer who is sort of losing steam."

US Consumer Confidence Declines to Five-Month Low

Confidence among U.S. consumers dropped in June for a fourth consecutive month as mounting concern over jobs and incomes dimmed the outlook for spending. The Conference Board’s sentiment index fell to 62, a five- month low, from a revised 64.4 in May, figures from the New York-based private research group showed today. Another report showed home prices were stabilizing.

The slide in confidence raises the risk that the slowdown in hiring revealed by last month’s jobs report will cause households to retrench, restraining the spending that accounts for about 70 percent of the economy. The weak labor market is overshadowing the benefit of the lowest gasoline prices in five months, one reason why companies like Ford are keeping an eye on attitudes.

“The employment situation continues to weigh on consumer minds,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, who correctly forecast the confidence index. “Usually consumers react to falling gasoline prices by increasing their spending, but this time around it looks like they’re a little bit cautious.” Read more >>

US Homeownership Rate Hits 15-Year Low

Despite the incentives to buy now — namely that average rates on a 30-year mortgages are now 3.7% — sales of single-family existing homes slipped 1.5% in May from a month earlier, according to data released today by the National Association of Realtors. Experts say the drop, which came during the historically busy spring season, suggests the housing market has a way to go to recover. If anything, the ranks of American homeowners are dwindling. The homeownership rate in the U.S. fell slightly from 66% to 65% during the first quarter of 2012 — the lowest in 15 years, according to the latest data by the U.S. Census. (It peaked at just over 69% in 2004.)

 Renters, meanwhile, have more inventory to choose from as owners who are unable to sell their homes often have no choice but to find tenants, says Dan McCue, research manager at Harvard University’s Joint Center for Housing Studies. The number of single-family homes for rent or being rented grew by two million units from 2006 to 2010, according to a JCHS report released this month, and McCue says the number has likely grown since then. “One third of all rentals are single-family homes,” he says. Read More >>

Manufacturing Slump Deepens From Euro Area to China

Euro-area manufacturing output shrank at the fastest pace in three years in June and a Chinese output gauge indicated contraction as Europe’s worsening fiscal crisis clouded global economic-growth prospects.

A gauge of euro-region manufacturing fell to 44.8 from 45.1 in May, London-based Markit Economics said today in an initial estimate.

That’s the lowest in 36 months. The preliminary reading was 48.1 for a Chinese purchasing managers’ index from HSBC Holdings Plc and Markit. A reading below 50 indicates contraction. The euro area’s turmoil is undermining global growth by eroding confidence of investors and consumers as companies step up job cuts.

Manufacturing in the U.S. probably expanded at a weaker pace in June, a Bloomberg News survey shows. While Greece’s Antonis Samaras was sworn in as prime minister with a coalition that will seek relief from austerity measures, Group of 20 leaders this week pushed Europe to step up measures that might contain the crisis. Read more >>

Investors Position for a Synchronized Global Slowdown

The insufficient job creation, stagnant earnings and alarming long-term unemployment highlighted by May’s disheartening jobs report underscore America’s persistent unemployment crisis. The numbers also speak to a synchronized slowdown that is now taking hold of the global economy — a phenomenon that is being signaled by virtually every other data release out of Europe, the U.S. and emerging countries.

The realization of lower global growth, together with increasing financial instability in some parts of the world (particularly Europe), is an important driver of the recent sharp selloff in equities and other risk assets. It has also turbocharged the collapse in yields on higher quality government bonds, with the 10-year U.S. bond at a record close of 1.46% on Friday (and Germany even lower).

To state the blatantly obvious, the best investor positioning for the last few weeks was an across-the-board defensive, “up in quality” one. The much more difficult (and urgently relevant) question on many people’s mind today is whether this still makes sense — particularly in view of the dramatic valuation moves.  Read more >>

Small Businesses Hire Fewer Workers and Cut Hours

Small businesses hired fewer workers in May and cut hours for those on their payrolls, an independent survey showed on Wednesday, raising prospects of another disappointing employment report.

Businesses added 40,000 new jobs, after increasing payrolls by an upwardly revised 60,000 jobs in April, according to Intuit, a payrolls processing firm. April's job count was previously reported as 40,000. The survey's findings contradict expectations of a pick-up in job gains in the broader economy this month as the weather-related distortions that held back employment growth in March and April dissipate.

The Intuit survey showed the average workweek for small business employees slipped 0.13 percent in April, leading to a 0.13 percent or $4 decline in the average monthly pay to $2,692. But that is equivalent to an annual salary of $32,300, meaning that many of the small business employees are working part-time.  Read more >>