Amid the confusing and bleak U.S. employment figures emerges one positive note: the foodservice industry continues to add jobs.
The Bureau of Labor Statistics weighed in on the job situation by reporting that initial jobless claims fell 12,000 to 365,000 in the week ending July 31 from a revised 377,000. One observer said that employment seemed to lack any momentum. The Gallup Poll said their research showed unemployment at 8.1 percent. ADP, the payroll processing firm, got hearts racing on Wall Street when they reported that private concerns added 201,000 jobs in August.
Unfortunately, as is the case most to the time, ADP and the Labor Department failed to agree and the government said that just 107,000 new private sector jobs were created in August, offset by a decline of 7,000 government positions for a tepid increase of 96,000. Many economists believe that the United States needs to generate 125,000 to 150,000 new jobs a month just to keep up with population growth. The Labor Department also reported, based on a different survey, unemployment dropped 8.1 percent in August from 8.3 percent in July. What would seem to be a positive statistic really isn't because the decline was entirely due to people leaving the workforce.
Other bleak news from the government notes that earnings dropped by 1 cent an hour and average hours worked stayed steady at 34.4.
An article in the Wall Street Journal that examined the "big picture" of the U.S. job situation stated that the country lost 8.8 million jobs between 2008 and 2010 and has gained back 4 million of them. While monthly job increases have varied widely the average has been 150,000 a month. From the historical perspective this isn't bad, except we are supposedly in a recovery and thus, the writer calls the numbers "lousy." We will need 300,000 to 400,000 new jobs a month for several months to repair the recession's job losses.
But, there is some good news. Of the 107,000 new jobs in August, 28,000 or 26 percent were added in the foodservice industry.
Economic News This Week
- The second quarter productivity rate was revised up to 2.2 percent by the Department of Labor. This would indicate that employees are working harder, which may also mean that employers will eventually have to begin hiring.
- Construction spending unexpectedly fell 0.9 percent in July, according to U.S. Commerce Department reports. A lack of subcontractors and workers is hurting home building, according to a CNBC report. Since the building plunge six years ago many building tradesman have left the business for other jobs.
- The Institute for Supply Management's August Manufacturing Index registered 49.6, its third consecutive month below the breakeven point of 50. This is the worst showing for the index since July 2009. Moreover, the Wall Street Journal carried an article that Purchasing Managers' indexes around the world are showing negative results for the Euro Zone, South Korea and China and there was a steep fall off for manufacturing activity in India.
- The Institute for Supply Management's Non-manufacturing Index (i.e., services) did show continuing expansion and actually increased slightly to 53.7 in August from 52.6 in July.
- Gallup's Economic Confidence Index fell to minus 27 in August, which matched the January low for this year. The index is far above the minus 52 recorded in August of last year when there was economic turmoil, including confrontation on the U.S. debt ceiling.
- Consumers cut their debt in July with consumer credit falling at a seasonally adjusted rate of 1.5 percent, according to the Federal Reserve. This is the first decline in consumer credit in 11 months. For the second month in a row consumers decreased their reliance on revolving credit (mostly credit card debt) with July seeing a decline of 6.8 percent. Consumers did increase their non-revolving debt (auto loans, student loans, mortgages, etc) but by just 1 percent. This appears to indicate that consumers are lacking confidence in the future.
- August U.S. car sales were a bright spot in the economic picture. The annualized rate rose to 14.52 million cars and light trucks with almost all the manufacturers showing double digit sales growth including the old "big three" U.S.-based auto makers.
Foodservice News This Week
- Independent full-service restaurants in the United States don't generate the sales volume that chain restaurants do but they outnumber chain units eight to one, according to data released by CHD Expert. While only 3 percent of full-serve chain restaurants have annual sales volumes of $500,000 or less, almost 62 percent of independent operators fall into this category. Nevertheless, CHD Expert believes that the independents can keep the chains at bay by being quick and nimble.
- The drought will add $4.00 a week to a family of four's grocery bill in 2013 and $2.50 a week to the four person family's food away from home costs, according to projections by The Food Institute.
- 7-Eleven has begun rolling out its expanded foodservice offerings including pizza and tacos in the San Diego area according to UTSandiego.com. The increased menu is being accompanied by store redesign and upgrades.
- Standex International reports that their foodservice equipment sales increased 3.9 percent in the manufacturers most recent quarter.
- McDonald's U.S. comparable store sales for August were up 3.0 percent. Thus, the 0.1 percent decline of McD's U.S. same-store sales in July may have been a fluke. Worldwide, McDonald's comp store sales were up 3.7 percent last month.
For detailed information on comp store sales on the Green Sheet click here.
For Equipment Supplier Financial Date click here.