November Employment Situation

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist

INDICATOR: November Employment Situation
KEY DATA: Payrolls: 120,000; Private Sector: 140,000; Unemployment Rate: 8.6% (down 0.4 percentage point)

IN A NUTSHELL: “It was nice to see the unemployment rate come down but if we are to see it continue to fall, firms will have to hire a lot more people than they did in November.”

WHAT IT MEANS: The November employment report was another of those good news/bad news releases. On the positive side, the unemployment rate fell sharply to its lowest level since March 2009. That was the teeth of the recession and the rate was racing upwards. Unfortunately, some of the decline came from a large drop in the labor force and that is not a sign of growing confidence that jobs are available. That said, the labor force numbers are fairly volatile so I will withhold judgment. Regardless, this large a decline in the unemployment rate is usually not sustainable unless job gains are being added robustly and that just is not the case. Hiring remains less than hoped for and as usual it was restrained by continued cut backs in the public sector. The construction sector is still shrinking though there have been other indications that activity has improved. Weakness in nondurable goods manufacturing almost completely offset increases in durable goods hiring. We did see the retail, finance, insurance, temporary help, education, health care and restaurant sectors add workers. So far this year, the private sector has added about 1.7 million new positions while the public sector has cut about 260,000 jobs. Earnings were down a touch and that does not bode well for income growth.

MARKETS AND FED POLICY IMPLICATIONS: Private sector additions to payrolls were better than initial expectations but not nearly enough to keep the unemployment rate from continuously declining. Indeed, I would not be surprised if the rate ticks up next month. But I don’t want to be the Grinch that stole the employment report as there is little doubt that the sharp drop in the unemployment rate will be the biggest news in the media. That should lead to some firming in confidence. Also, the solid Black Friday and Cyber Monday sales numbers, combined with improving vehicle sales point to consumers slowly opening their wallets. That is the signal businesses need to start ramping up hiring. Actually, that could be happening already and the data are simply not keeping up. Both the August and September job gain numbers were revised upward by about 100,000 from the original estimates. Over the past three months, the private sector has added an average of about 160,000 workers and that is likely to be revised upward as well. While that pace is not great, it is much better than is commonly perceived. It is also in hailing distance of the rate needed to keep the unemployment rate coming down fairly consistently. But we are not there yet and it will require continued consumer spending and clearing the European financial and coming economic disaster hurdle before that does occur. All said, this is a good report that holds out hope for better things to come but not so great that anyone should think the labor market is healthy and all is well with the world.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

Building A Home Theater

Building A Home Theater

These days, a home theater is one of the most popular trends in the nation. Homeowners are opting to save a bundle on the cost of theater tickets by bringing the fascinating world of cinema into their own homes in a big way.

Quality Counts

When it comes to creating a home theater, the choice is yours when it comes to the level of quality that you want to deliver. A home theater can include something as basic as a television and DVD system or it can include a projection screen with surround sound and, for the family who really wants the authentic experience, actual theater-style seating.

Money Matters

Building a home theater isn’t cheap, which is why it’s important to set a realistic budget before getting started. Unless you are an expert at installation, hiring a professional to install your home theater may be a wise idea. This means that you will not only be considering the cost of the theater itself, but also the labor necessary to get the job done.

Comparison Shopping

If you decide to hire a professional installation crew, make sure that you shop around and compare rates. In many cases, you will save a bundle of money by purchasing the materials yourself. This includes the television or projection screen, seating and sound systems. This way, all that’s needed is someone to install the items and make sure that the wiring is correct.

You may be wondering why it’s important to consider purchasing the essentials yourself. Unless you have full control over the accessories for your home theater, you will not know whether or not your contractor is charging you the actual cost for materials. By purchasing everything yourself, you can also shop sales and take advantage of some great deals offered by retailers.

Sign Here, Please…

Once you have chosen the company to install your home theater, make sure that you get everything in writing. This includes the cost of labor, the completion time, payment schedules, deposits, etc. If you have an oral agreement, transfer it onto paper and get it signed before proceeding with the project.

Don’t Forget The Popcorn

No theater experience would be complete without the popcorn, so don’t forget to include a popcorn machine in your theater room. These portable units are sold as tabletop appliances that can create your favorite style of buttery popcorn in minutes. Most home theaters feature a small snack counter packed full of goodies, which makes the design even more authentic.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisors, and are not providing any financial advice, you should consult with a licensed financial advisor prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

February Supply Managers’ Non-Manufacturing Survey

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist
INDICATOR: February Supply Managers’ Non-Manufacturing Survey
KEY DATA: ISM (Non-Manufacturing): 59.7 (up 0.3 pt.); Business Activity: 66.9 (up 2.3 points)
IN A NUTSHELL: “The economy is gaining speed and only an extended period of high energy costs can sidetrack the recovery.”
WHAT IT MEANS: At least through February, the economy was not only in good shape but was also starting to shift into higher gear. The Institute for Supply Management’s survey of service and construction firms showed that conditions are solid and are even getting better. Activity is robust (the index was the second highest on record), orders are growing, though a touch slower than they had been, hiring is picking up steam and order books are filling faster. This is very similar to Tuesday’s report on the manufacturing sector so it looks like the improvement in the recovery is spread across almost all segments of the economy.
MARKETS AND FED POLICY IMPLICATIONS: We are at the points where the economy is no longer recovering but has entered the expansion phase. That is clear from the latest economic data. Not only are the supply managers telling us conditions are good and getting better but even the labor market numbers are improving. Regardless of tomorrow’s employment report, the sharp decline in unemployment claims tells me that the labor market is firming. Layoffs are largely over and if the economy does keep improving, job growth is headed upward. Whether it will or not the coming months will see even stronger growth depends on factors beyond anyone’s control. Energy is that wild card due to the political unrest. The uprising in Libya continues and how it is resolved remains uncertain as to its impact on oil supplies. But Libya is just the latest but it may not be the last of the countries that gets wracked by the desire to overthrow undemocratic governments. Even if the Libyan situation gets resolved in the best way possible tomorrow, the political risk of future changes will not come out of the markets anytime soon. Thus, we should take this report and look forward with lots of hope and expectations but also remember that the 800 pound gorilla, energy, is still looking over our shoulders.

RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisiors, and are not providing any financial advise, you should consult with a licensed financial advisior prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com

February Supply Managers’ Manufacturing Index

NAROFF ECONOMIC ADVISORS, Inc.
Joel L. Naroff
President and Chief Economist

INDICATOR: February Supply Managers’ Manufacturing Index
KEY DATA: ISM (Manufacturing): 61.4 (up 0.6 point)
IN A NUTSHELL: “”Manufacturing continues to soar and that is the best indication that the economy was improving before the oil price spike.”
WHAT IT MEANS: There is still a lot of uncertainty about the state of the economy and that has gotten worse now that oil is hovering around the $100 per barrel level. But at least we can say that conditions were pretty decent before the chaos in North Africa led to the sharp increase in energy. The manufacturing sector continues to expand at a robust pace, according to the National Institute for Supply Management. The February survey of purchasing managers rose a little in February. While the improvement was small, it is the level that is awesome. You have to go back to 1983 when the economy was bouncing back sharply from the back-to-back recessions to see an overall activity index this high. New orders, including exports and imports, are not only strong but they are growing faster. Production is accelerating and backlogs are building as well. As a consequence, firms are hiring new workers to meet the expanding demand. Indeed, the employment index is one of the highest in the sixty three years this index has been compile. On the other hand, cost pressures are building and while a whole variety of commodities were up, there were none that were reported to be down.
MARKETS AND FED POLICY IMPLICATIONS: This is a strong report that under most circumstances would make everyone smile. But the skyrocketing cost of energy is overhanging the economy. Mr. Bernanke chimed in on that issue today indicating he was not that worried about the higher costs unless they were sustained. That makes sense since he is looking well down the road. But in the short run, there is likely to be some easing in consumption but not enough to kill the recovery, only restrain it. The health of the manufacturing sector supports the view that without a long period of very high energy prices, we should get through this crisis. For now, though, it is likely that the first half of this year will be another period of modest recovery. Hopefully, things shake out over the next few months and we can pick up where we left off, that is, with an economy that is poised to change gears.
RE/MAX Connection Realtors disclaimer:
RE/MAX Connection Realtors are not licensed financial advisiors, and are not providing any financial advise, you should consult with a licensed financial advisior prior to making any financial decisions. RE/MAX Connection Realtors are only providing this economic statement from Naroff Economic Advisors, Inc. for informational purposes.
Our company accepts no liability for the content of this email/blog, or for the consequences of any actions taken on the basis of the information provided. Any views or opinions presented in this email/blog are solely those of the author and do not necessarily represent those of the company. Finally, the recipient should check this email and any attachments for the presence of viruses. The company accepts no liability for any damage caused by any virus transmitted by this email.
RE/MAX Connection Realtors, 1000 East Lincoln Drive, Suite 2, Marlton, NJ 08053 www.goconnectionnj.com