World News

Egypt

• In the wake of last week's protests, which forced President Hosni Mubarak out of office, the Egyptian cabinet approved a law yesterday that criminalises strikes, protests, demonstrations, and sit-ins that interrupt private or state owned businesses or affect the economy in any way. Individuals who call for or incite action can be sentenced to up to one year in prison and fined up to half a million pounds. The law has to be approved by the Supreme council of the Armed Forces, and would be in force as long as Egypt is in a state of emergency (currently, 30 years and counting).

European Union

• The Telegraph is reporting that the European Commission has released plans to create a "single European transport area" intended to create "a profound shift in transport patterns for passengers" by 2050. Goals include getting 50% of all travel over 186 miles to be made by rail, and reducing the number of gasoline and diesel-driven cars and trucks within cities by half by 2031 and to 0 by 2050. Opposition to the plan is already beginning to be heard.

International

• In an opinion piece written for al Jazeera, economist Robert Shiller expresses his belief that the next market bubbles will be in food and farm land.

Japan

• Immediate safety upgrades have been ordered at all 55 of Japan's nuclear power plants. The required upgrades include improved back-up power and having fire trucks with hoses ready at all times to ensure cooling for reactors and spent fuel pools. Japanese Minister of Economy, Trade, and Industry Banri Kaidea does not anticipate that these upgrades will require plant operations to be halted.
• Tokyo Electric Power (TEPCO), which has already secured $24 billion in private loans, has warned that this will not be enough to keep it afloat, repair damage at Fukushima and other sites, and pay reparations and other damages they anticipate.

Libya

• Rebel forces have been driven out of the oil town of Ras Lanuf under heavy bombardment from the Libyan army.
• OPEC oil production has not compensated for production losses in Libya. Production has fallen about 300,000 barrels per day from February's average, although some analysts are expecting to see Saudi Arabia begin boosting output further to compensate.

United States

• President Obama is preparing a speech in which he will outline his strategy to reach an announced goal of cutting US oil imports by a third over 10 years. The plan is expected to focus on increasing domestic energy production, encouraging the use of more natural gas in public transit, making vehicles more fuel efficient, and encouraging the use of biofuels and other alternative energies.
• Al Jazeera is reporting an increase in illnesses and deaths along the Gulf Coast due to the chemical dispersants used by BP.

ADP Employment Report

ADP, also known as Automatic Data Processing, is "one of the world's largest providers of business outsourcing solutions. Leveraging over 60 years of experience, ADP offers a wide range of HR, payroll, tax and benefit administration solutions from a single source."[1] These services give them vast insight into national employment, and changes in national employment.

Much like Challenger, Gray, & Christmas, they collate this information into a monthly snapshot of the US employment situation. ADP focuses entirely on the private sector, however, because that's what they work with.

In February, they reported a seasonally adjusted employment increase of 217,000 jobs. Looking at the March report, we see two things right away: First of all, private-sector non-farm employment increased by 201,000 in March on a seasonally adjusted basis. Secondly, February's job growth was revised downwards to 208,000.

164,000 (75.57%) of those new jobs came from the service-providing sector and 37,000 (18.4%) came from the goods-producing sector. Large businesses were responsible for 17,000 (8.45%) of the new jobs, medium-size businesses for 82,000 (40.8%), and small businesses for 102,000 (50.7%).

[1] From ADP's web site.

The Challenger Job Cut Report

Challenger, Gray, and Christmas is, according to their web site, "the nation's first, oldest and premier outplacement consulting organization. Our firm has a proven track record of successfully providing top quality outplacement programs for executives, middle managers and long-term or highly valued employees." They work with companies that are laying off employees to assist those employees in finding new positions. As a result, they have some insight into current plans to cut jobs.

One of the things they do with this data is release a monthly Job Cuts report. Traditionally, this report is not considered as significant as some of the other employment reports (ADP Employment, first time jobless claims, and employment situation), but it is still an additional resource that can be used to gauge what the national employment situation looks like.

The February report indicated that employers had announced plans to cut 50,702 jobs. In the report for March, we learn that the rate of downsizing is slowing. Employers announced plans to reduce payrolls by 41,528 jobs, bringing the Q1 job cut total to 130,749. That sounds like a lot, but Q1 2010 saw 181,183 planned layoffs. In fact, this is the lowest Q1 layoff total since 1995.

Of those 41,528 job cuts, 19,099 (46%) are public sector, up 17% from February's 16,380 planned layoffs. The telecommunications industry was the second largest source of job cuts, but they only had 2,378 announced for March. Interestingly enough, the insurance industry had no job cuts planned for March. 12,791 (30.8%) of the job cuts are from restructuring, 10,247 (24.7%) are from cost cutting, and 5,75313.9%) are from businesses closing.

Consumer Confidence

Consumer Confidence is one of the big movers and shakers amongst economic measures. It's current to forward-looking, so it's one of the leading indicators of consumer spending. And since consumer spending is a huge chunk of GDP, good consumer confidence figures fill analysts and traders with hope for the future.

February's figures may be a hard act to follow. The Consumer Confidence Index hit a level of 70.4, which was a three-year high. The Present Situation Index increased 2.3 points to 33.4, and the Expectations Index increased 7.8 to a level of 95.1. And the Econoday-surveyed analysts aren't expecting march to follow last month's act. Instead, they're expecting to see the Consumer Confidence Index fall to a level of 64.0.

So, how do the actual numbers look? According to The Conference Board, the Consumer Confidence Index fell to 63.4 (falling below expectations). The Present situation Index improved, rising to 36.9, and the Expectations Index fell to 81.1. The Conference Board fully credits the decline in consumer confidence to the decline in future expectations: "Consumers' inflation expectations rose significantly in march and their income expectations soured, a combination that will likely impact spending decisions," said Lynn Franco, Director of The conference Board consumer Research Center.

World News

China

• A study of international scientific output - as defined by the total number of peer-reviewed papers published by scientists in various nations - indicates that China is on course to overtake the US in scientific output by 2013. Over the 12 year period covered by The Royal Society's study, US scientific output increased by 8%. In the same period of time, Chinese scientific output increased by 722%.

Japan

• Traces of plutonium-238, plutonium-239, and plutonium-240 have been found in the soil around the Fukushima nuclear complex. Japan's Nuclear and Industrial Safety Agency has said that the plutonium levels are not harmful to human health, but it could mean that reactor No. 3's containment mechanism has been breached. "Plutonium is a substance that's emitted when the temperature is high, and it's also heavy and so does not leak out easily," said agency deputy director Hidehiko Nishiyama. "So if plutonium has emerged from the reactor, that tells us something about the damage to the fuel. And if it has breached the original containment system, it underlines the gravity and seriousness of this accident." Opposition leaders in the Japanese Parliament are now demanding that the evacuation zone around the plant be widened.

Libya

• In a speech televised last night, US President Obama assured the American people that the United States would not get bogged down in a police action in Libya. "And tonight," the President said in his speech, "I can report that we have stopped Qaddafi's deadly advance." Commentators have observed, however, that he did not actually explain how long the United States would remain involved in the Libyan police action, or outline an exit strategy.
• This morning, Libyan forces pushed the rebels as far east as Bin Jawad.

United States

• Indiana prosecutor Carlos Lam has resigned after acknowledging that he advised Wisconsin Governor Scott Walker to discredit labor union protests by orchestrating a fake assault on himself, possibly with a firearm.
• A man in San Antonio was arrested after a gun battle with police over a price increase in Taco Bell's Beefy Crunch Burritos.

Store Sales

I'm just going to cover the ICSC-Goldman Store Sales and the Redbook in a single article this morning.

Last week, the ICSC-Goldman Store Sales survey showed week-over-week sales down 0.1%, and year-over-year sales up 3.0%. The Redbook, on the other hand, showed year-over-year sales up 2.4% for the same period.

Econoday shows a nice little rally in both figures. The ICSC-Goldman Store Sales are being reported as up 0.2% week over week fro the week ending 3/26, and up 2.6% for the year. For the week ending 3/26, the Redbook is being reported as showing year-over-year sales up 2.6% as well.

Personal Income and Outlays

Personal Income and Outlays is a report tracking (brace yourselves) personal income. And outlays.

No, really, that's pretty much it. What do you want? It's very much a "truth in advertising" report.

All right, technically, it tracks the month over month rate of change in personal income, consumer spending, and a price index (which is a fixed basket[1] of goods and services that is purchased by the average consumer)[2]. The report is a lagging report, giving data for the previous month. That still puts it ahead of the curve for GDP releases though. And since consumer spending represents roughly one-third of GDP, this is an important number to watch.

In January, personal income was 1.2%, consumer spending was up 0.3%, and the core PCE price index was up 0.2%. Looking to February, the Econoday-surveyed analysts are expecting to see personal income up 0.4%, consumer spending up 0.6%, and the core PCE price index up 0.2%.

The official report comes to us courtesy of the Bureau of Economic Analysis. From it we learn that personal income was up 0.3% in February (missing expectations), consumer spending was up 0.7% (beating expectations) and the core PCE price index was up 0.2% (meeting expectations). Other interesting data points include:

• Disposable personal income[3] was up 0.3%. However, in chained (2005) dollars[4], it was down 0.1%.
• Real DPI, which is DPI adjusted to remove price changes, decreased 0.1% in February (compared to a 0.3% increase in January).
• Personal current taxes increased $2.2 billion in February, compared to a $55.4 billion increase in January.
• Personal savings as a percentage of disposable personal income was 5.8% in February, down from January's 6.1%.
• The PCE price index increased 0.4% in February, if you add food and energy costs back in.

The key takeaway from this, the part that will probably get people excited, is the better than expected consumer spending. That is the part that will be seen as pointing towards Q1 2011 GDP growth.

[1] For certain values of "fixed".

[2] In other words, it's yet another inflation measure. And, like all inflation measures, it has a "core" component as well.

[3] Defined by Barron's Dictionary of Finance and Investment Terms as "personal income remaining after personal taxes and noncommercial government fees have been paid. This money can be spent on essentials or nonessentials or it can be saved."

[4] Chained dollars is a method of adjusting real dollar amounts for inflation over time.