Unemployment Data: Gosh the Economy Looks...Great?
Friday's unemployment report was a shocker. Expectations were very low, and then the report showed a +180,000 increase in March, with revisions to January and February adding +32,000. Taking into consideration the original numbers announced in January and February (+146,000 and +97,000, respectively) that means a total increase of +455,000 since the beginning of the year. The record employed workforce is now at 146,254 million. The unemployment rate dropped to 4.4%. In the fine print, it noted that unemployed plus discouraged workers dropped from 4.9% in January to 4.6% in March. The average work week increased from 33.8 to 33.9 hours. The household survey, which includes self-employment, indicated a +335,000 job rise.
In our tracking of the Bureau of Labor Statistics adjustment for net new businesses (births less deaths), we are now at 89.420 net new businesses per month, or 1.07 million of them, down slightly from last month.
The report is yet another message that the Fed's lowering of interest rates is not in the cards. They will keep rates where they are and a rate increase is more likely. The yield curve is still inverted to a small degree.
The Institute for Supply Management reports this week both showed slow growth, but the employment and prices components of their indices were quite negative. Both themanufacturing and non-manufacturing reports were clean and shiny on the outside, but once you opened them up, there were plenty of things to ponder.
The slow growth scenario I outlined in last week's webinar is still the one most likely to occur. Employment is a lagging indicator, the last to slow and the last to rise in slowdowns and recoveries. We're more likely to have a slowdown than a recession. As I mentioned in a prior note, February's report was rather disappointing, since the household survey was actually negative, down -38,000. That figure was not revised.
We should also remember how far the economy has come. At this point, every 1% change in GDP represents in the range of $130 billion in output, which is larger than most industries, and is just under the economic output of Venezuela. When the U.S. economy grows at 2.5%, that growth alone is about the size of the GDP of Sweden. Even a slow growth economy for the U.S. is very, very large, and it's easy to forget the scope of that amount of money.
Printing Shipments are Holding Their Own, But Just...
February's printing shipments were up +$128 million compared to February 2006, a +1.8% increase. February is traditionally one of the slower months of the year; being a short month is one of the reasons. This was the tenth consecutive month of current dollar increase, but on an inflation-adjusted basis, it was down -$41 million, breaking a six month string of positive comparisons to 2006.
Comparisons to the beginning of 2006 are rather easy, since the first five months of last year were rather dismal. Compared to February 2005, it was down $-50 million, and down -$487 million on an inflation-adjusted basis.
It's not easy out there, and the industry still has to fight for every dollar it gets.
The list below shows how major manufacturing industries are doing, and it's nice to see us near the top of the list. We're not growing as rapidly as current dollar GDP, but we are growing faster than the annualized inflation rate. Again, these are comparisons to the first two months of 2006, when our shipments had dropped -3.1% compared to 2005.
Leather and allied products +11.4%
Primary metals +7.6%
Miscellaneous durable goods +5.9%
* LAST FOUR QUARTERS CURRENT DOLLAR GDP +5.7%
Electrical equipment, appliances, and components +4.8%
Printing +3.4%
Fabricated metal products +3.3%
* CONSUMER PRICE INDEX (last 12 months) +2.4%
Machinery +1.8%
Beverage and tobacco products +1.8%
Computers and electronic products +1.4%
Food products +0.6%
Durable goods industries +0.3%
Paper products -0.9%
All manufacturing industries -1.0%
Textile mills -1.2%
Chemical products -1.3%
Transportation equipment -1.5%
Apparel -2.2%
Nondurable goods industries -2.5%
Plastics and rubber products -3.2%
Furniture and related products -5.9%
Nonmetallic mineral products -6.6%
Textile products -8.1%
Petroleum and coal products -10.7%
Wood products -19.1%
Two weeks ago, I commented at Print Outlook that it was interesting how “new media” was now being marketed as “modern media” by its proponents. Among the reasons are that these media are now mainstream, and there really is no apology for their newness. Internet advertising, for example, is expected to surpass radio advertising this year.
Our industry has a similar problem on the digital printing side. Digital printing is now mainstream. Referring to some press technologies as being for “short run color” only confuses buyers when the capability of these devices now far exceeds what they could do at their market introduction. There are still many printers who think that digital printing equipment is not for them because the equipment is only suited for variable data printing, and not for their more typical work.
The bigger issue is that the media mix is constantly changing. All media production, no matter how young or old the technology behind it may be, should be considered as experimental, and not modern. This is because the applications for the technologies are experimental, not the technologies themselves. No one really knows in a definitive way how various media interact today, let alone how they will interact tomorrow. This is the time to build compelling applications where the strategic and tactical blended use of new media, print media and other media play off each others’ strengths. People see ads in magazines and go online. They get direct mail pieces and by via e-commerce. A billboard or sign sends them to a search engine. These are all new, yet they are all old. No one knows how they work together for certain, but that means there are no real experts, a vacuum that some entrepreneurial print communications businesses should be anxious to fill, even with their smallest customers, the ones who need guidance the most.
Much of the industry seems stymied about how to ensure that print—and the print service provider—is included in the experiments. I have said for many years that printers need to stay ahead of their clients, and should worry less about staying ahead of their competitors. Today, we have to take that one step further: staying ahead of the client's target audiences is becoming critical.
Being modern is not all it's cracked up to be... it just perpetuates the status quo. What will be modern 18 months from now is more important, and that's where cutting edge print businesses should be. Modern? That's just for today. Where do you want to be 12, 18, and 24 months from now?
The Information Explosion Continues
I strongly recommend reading a free report about the world's information.
According to the report, 161 exabytes of digital information were created and copied last year. An exabyte is a million terabytes or billion gigabytes. To dramatize, it's claimed to be to 12 stacks of books, each extending the 93 million miles between the Earth and the sun. That is expected to grow by a factor of six by 2010, a 57% annual growth rate.
The largest component will be images captured worldwide by more than 1 billion devices, from digital cameras to camera phones, medical scanners, and security cameras. The number of images captured on consumer digital still cameras in 2006 exceeded 150 billion worldwide, while the number of images captured on cell phones hit nearly 100 billion, according to the report. Digital photography by 2010 will capture more than 500 billion images annually.
Digital storage and the communications technologies needed to access the content mean that there will be continued pressure to adopt digital workflow and printing devices in the printing business. Though our industry will capture only a small portion of this volume of data—since most of it will never need to be printed, but just viewed—it is a reminder of how essential it is to be part of this revolution in our operations and in our abilities to develop products and applications that encourage people to print their images in new and interesting ways. A great example of this at work are the applications offered by digital photo sites Shutterfly and Kodak EasyShare, such as photo books, calendars, and other printed items that make use of consumer photos.
Next Week
A special “Best of Dr. Joe” will appear in this space next week. On Tuesday, April 17, I'll be wandering the AIIM/On Demand Expo in Boston. So if you see a middle-aged bald man standing next to a teenager who appears to be explaining everything to him, that bald guy is me, and that teenager is my chief technology officer, Dan Webb. Be sure to stop and say hello.
There will be a new chart of the week on April 16, and I'll break in with commentary on theEconomics and Research page as needed. Watch for a special post on Friday afternoon, April 13, about industry profitability. The Commerce Department is scheduled to release its data that morning.
I often comment on various postings at the PrintCEOBlog, so please look for me there as well.
On Friday, April 21, I have yet again been entrusted to kickoff PrintFest in Long Beach with a keynote address about the benefits of print. I'll try to keep my comments brief so we can have a healthy question and answer session.
