The leading economic indicators were up again, stumping the experts, and showing signs that the economy is still growing.
There was a lot of hand-wringing over last week's increase in jobless claims. This is a volatile measure, and this week's data reflected a decrease. That's why most people follow the 4-week moving average, which is still below 350,000, and is now at 347,000.
For those who say the economy has not created jobs, here are the household data direct from the Bureau of Labor Statistics; the numbers speak for themselves:
Employment is dynamic, and changes are easily distorted by spinmeisters in any direction that serves their needs. People enter and leave the labor pool for more reasons than can be imagined. One month young workers increase and older workers decrease. The next month it's the opposite. The Northeast shows a decline and the West shows an increase, and then it reverses just weeks later. And as evidenced by climbing sole proprietor income levels, an increasing number of workers are starting their own businesses, effectively taking themselves off the grid with respect to the Bureau of Labor Statistics payroll survey.
So while we finally have some good economic news, few are cheering it, especially in a year divisible by four. Any expression of pleasure with good news seems to be followed by footnotes and equivocations.
Speaking of footnotes and equivocations, Alan Greenspan, skilled at obfuscatory oration, testified on Capitol Hill twice this week. There was much hemming and hawing over the content of the payroll jobs report and how these were lower-paying service jobs, etc., etc., the usual harangue. These rants always assume that jobs and payroll costs are static. Basically, the assumption behind the questions is that the economy is not dynamic and never changes. If benefit costs keep going up, there has to be some give in the payroll dollars now and then as those benefits have to be paid for. And as far as service jobs not being good, I'm still shocked at how many people still fall for that. Most of them are journalists, a job which, believe it or not, is classified as a manufacturing job according to older data classifications. Unless, of course, they work freelance, in which case they are included in the services data. So yes, people in high-paying service jobs are complaining that service jobs are not high-paying. These same folks are buying insurance (services), refinancing their mortgages (services), buying things with credit cards (services), visiting doctors (services), eating out at restaurants (services), flying on airplanes (services), making telephone calls (services), having their houses painted (services), sending their kids to school (services), using accountants to do their tax returns (services), and, okay, I know, you get the idea.
One of the funnier exchanges in the Greenspan hearing, at least to me, was when a senator complained about the loss of manufacturing jobs in her state, especially in paper mills. Gee, Congress passed laws to discourage some of this manufacturing, preserve forests, encourage recycling, and get people to use the Internet. So now that the laws are having their planned and desired effect, they don't like it!
It was quite fitting, I thought, that I was watching the testimony while on my treadmill. I had a lot of activity, but I wasn't going anywhere. A lot like Greenspan's testimony and Q&A.
The gist of Greenspan's arduous testimony was that the economy is getting stronger, and deflation risk is virtually gone. This sent a mild chill through the stock and bond markets as they feared a rise in interest rates (yes, skyrocketing all the way from 1.0% to 1.5%!). I personally think they should have pulled the trigger on that a few months ago. But they're focused on the payroll survey, and if we get another one or two strong payroll reports, they'll increase interest rates at the late June meeting. If not, then everyone will wonder why they didn't raise rates, spurring a whole range of busy chatter about that.
Historically the printing industry has been known for its entrepreneurial spirit, but lately it seems that many of us have been entrepreneurially dispirited. It's easy to be an entrepreneur in a growing marketplace. But despite the fact that our industry is not rebounding as we would like, this is a time for true entrepreneurial leadership. Ours is an industry where a unique print business could form over a chance meeting of a buyer and a printer who dream up a new idea or a new approach that they couldn't find elsewhere and decide to go get it done.
Often entrepreneurship comes from someone outside the industry who is not locked in to accepted industry practice or procedure. Entrepreneurship is aggressive, not defensive. It's not cautious, but it's judicious (unlike the Internet bubble, which was reckless and ostentatious). Entrepreneurship creates waves, it doesn't ride them. The market smacks it down, it takes it on the chin, and it gets up again, wiser and smarter, and keeps moving forward.
A couple of weeks ago, February printing shipments were reported as $-211 million compared to February 2003, making the industry the second worst performing manufacturing industry (behind leather and allied products; I wonder if that industry has a Dr. Doom) for the first two months of the year. That's not a distinction of honor, to be sure. Indeed, more than concern needs to be expressed about our situation.
This is an industry that changed the world for the last five hundred years. Our time is not up, but some are certainly acting as though it is. Others just seem to sigh and hope that things will get better by themselves. Others just seem to ignore the whole situation. These difficult periods can unleash great revolutions in industries. Our revolution needs to start yesterday. And it always starts with individual business owners doing things others won't. And it often starts with disgruntled workers who want to do things differently. If you have people on your staff who like to rock the boat, let them. If you don't have anyone like that, hire one. Revolutions start with discontent. Maybe we don't have enough of that yet.
I ran into two interesting articles recently that imply a competitively effective role for print. The key point in the first one is that "e-mail is deployed by the smartest marketers as a tactical tool that uses precision targeting to achieve a high degree of relevancy to the recipient." It also posits that e-mail is viewed as a retention tool; that is, that e-mail is a way to build and maintain brand loyalty as opposed to being a customer acquisition tool. Now that's interesting! Perhaps print's new role can be as a prime customer acquisition tool. With one out of six e-mails not reaching intended opt-in recipients due to spam filters, it can be argued that mailed print is still required as part of any well-run campaign.
On the Web:
Video games have now surpassed newspapers and magazines among young males in terms of the time they spend with media. In fact, the time this group spends on video games is almost equal to their Internet use. Look for retailers and others trying to hit this demographic to find ways to tie in games with promotions or other communication methods.
Some people were shocked when Gateway Computer announced the closure of its Gateway Country stores. It was speculated that Gateway's purchase of eMachines would result in retailers of the eMachines products jumping ship had Gateway kept its stores. Don't fall for that story; the truth is even simpler. Gateway was a good company at one time but started going downhill not long after its IPO a few years ago. "Professional management" replaced the culture that made the company one of the darlings of the computer world, and its recent forays into consumer electronics (digital cameras, home entertainment, big screen televisions) were dismal failures. The company rarely met forecasted earnings, driving industry analysts and stockholders away.
My worst experience ever in buying a computer was with Gateway, when it arrived without some critical parts (but with the manuals!). When I had to return it, they wanted to charge $100 for shipping because I couldn't wait days and days for a replacement. In the meantime, I had ordered a custom built PC from PC Connection and received it the next day. Last year, Gateway sent a letter to all ex-customers asking how they could get us back. I responded with a request for my $100 back. No answer (no surprise, their phone sales rep never called me back when I had a problem, but they were very anxious to help before I ordered). I buy one computer a year; I'm a nice customer to have, and the $100 would have come back to them in spades.
The Gateway story reminds us all of a basic business tenet: don't forget what got you to the top. The stupid cow and barn ads with Gateway staff in costume ogling computers weren't so stupid after all: they created a loveable brand that had a culture of excitement and playfulness. When the MBAs and their spreadsheets came in to run the place, it became a cookie-cutter company that offered no special incentive to buy. It's not the first time a boatload of IPO money provided the fertilizer that killed a company.
I recently received a letter from Gateway, explaining their business changes. They were so concerned that I understand why they closed their local store and how the eMachines acquisition would make them stronger that they just had to write. It's always nice to write to your ex-customers with the warmth of a form letter.
On a positive note, I've been seeing more CEOs in the media discussing how they would not be using newfound cash hoards to make acquisitions. Instead they will use it for stock buybacks and increased dividends (gasp!). This way they are less likely to stray far from their core competencies which they considered to still be growing markets. Sometimes the pendulum swings back; enjoy it while you can.