January 16, 2014

After Just Two Years, AP Stopped Tracking County-Level ‘Economic Stress’ in May 2011; Now We Know Why

In May 2009, the Associated Press, aka the Administration’s Press, announced that it would be “launching an index that will provide monthly, multi-format updates on the economic stress of the United States down to the county level.” Not a bad idea, especially if you were concerned that evidence of an economic recovery under Barack Obama would not otherwise be convincing.

The AP likely believed that since an overwhelming percentage of U.S. counties lean conservative (remember those Bush v. Gore county maps?), a large majority of U.S. counties would likely recover in time for the 2010 congressional elections, or in the worst-case scenario, the 2012 presidential election — even if the nation as a whole did not. A statement that “most counties in the U.S. have recovered from the recession” would have been quite useful in defending congressional Democrats and Barack Obama’s incumbency. But a recently released report from the National Association of Counties (NACo), which was covered poorly by the Wall Street Journal and virtually ignored by almost everyone else, shows that it hasn’t happened.


Best Buy Misses Big

Filed under: Business Moves,Economy — Tom @ 8:57 am

Are we really sure about that 3.8% overall Christmas shopping season increase the National Retail Federation is touting?

Business Insider (bolds are in original):

Best Buy shares were down as much as 33% to $25.32 in pre-market trading, after the retailer announced horrible holiday results.

Best Buy now expects its Q4 non-GAAP operating income to be 175 to 185 basis points lower than the 5.7% non-GAAP operating income a year ago.

Best Buy said U.S. comparable store sales were down 0.9% in the nine weeks ending January 4, 2014. But were up 0.1% internationally.

The store did however see a 23.5% jump in comparable online sales for the same period, compared with 10% a year ago.

“When we entered the holiday season, we said that price competitiveness was table stakes and an intensely promotional holiday season is what unfolded,” said Hubert Joly, Best Buy president and CEO said in a press release.

“…However, our holiday revenues were negatively impacted by a number of factors, including: (1) the aggressive promotional activity in the retail industry during the holiday period, which we believe did not result in higher industry demand and had a deflationary impact on our revenue; (2) supply constraints for key products; (3) significant store traffic declines between “Power Week” and Christmas; and (4) a disappointing mobile phone market.”

“Best Buy is out with its holiday sales update and to put it mildly, it’s on the shocking side,” said Brian Sozzi of Belus Capital Advisors.

… Multiple retailers have said competitive pricing during the holiday season weighed on profits.

Best Buy’s full press release is here. OUCH — Nine-week comparable store consumer electroncis and entertainment sales were down by 6 percent and 6.6. percent, respectively, compared to the same nine weeks last year.

These results don’t surprise me as much as they are apparently surprising others. My impression is that store traffic throughout the economy cratered between “Power Week” and Christmas. Yes, weather was a factor during the first weekend after “Power Week,” but the pickup during the week after that was not that impressive.

This certainly doesn’t bode well for anyone in retail who was hoping to turn their seasonal job into something longer-term this year.

Initial Unemployment Claims (011614): 326K SA; Raw Claims Only 4% Lower Than Same Week Last Year

Filed under: Economy,Taxes & Government — Tom @ 8:24 am


Seasonal Adjustment Factors:

  • Week ended Jan. 11, 2014 — 164.1
  • Week ended Jan. 12, 2013 — 159.1

Raw claims:

  • Week ended Jan. 4, 2014 — 483,241, per DOL’s detailed history listing available here (DOWN from the original 486,033 last week, which should reduce last week’s seasonally adjusted figure to about 327,000)
  • Week ended Jan. 12, 2013 — 556,621

That 164.1 is a HUGE seasonal deflator.

For Bloomberg’s 330K prediction to come true, raw claims will have to be 542K or lower (542K divided by 1.641 is 330K, rounded).

Today’s raw claims had better be wayyyyyy lower than that – lower than 500K, I would hope, which would translate into a seasonally adjusted 304K — or it will in my view be a potential sign of serious trouble. And yes, I know that this is a week which has traditionally shown high raw claims. But seasonal hiring for Christmas shopping season was not as high as it has been in the past.

The report will be here at 8:30.

HERE IT IS (permanent link):

In the week ending January 11, the advance figure for seasonally adjusted initial claims was 326,000, a decrease of 2,000 from the previous week’s revised figure of 328,000. The 4-week moving average was 335,000, a decrease of 13,500 from the previous week’s revised average of 348,500.


The advance number of actual initial claims under state programs, unadjusted, totaled 534,431 in the week ending January 11, an increase of 51,190 from the previous week. There were 556,621 initial claims in the comparable week in 2013.

This will be spun as okay news. I don’t think it is.

If last year’s seasonal deflator had been used on this week’s raw claims, the seasonally adjusted result would have been 336,00 (534,431 divided by 1.591, rounded), or 6,000 claims higher.

Change.org Responds to Column on Staples and Part-Timers; I Respond to Them

Filed under: Activism,Health Care,Taxes & Government — Tom @ 7:54 am

My Tuesday PJ Media column (this morning’s BizzyBlog mirror) generated a “correction requested for your column” emailed to me by a Brianna Cayo Cotter, Managing Director of Communications at Change.org :

I just saw your column, “Phony Change.org Petition Protests Cuts to Part-Timers’ Hours at Staples” and wanted to reach out and request a correction based on some inaccuracies in the piece.

Your headline labels Sue’s petition on Change.org as “phony,” and the article suggests that “Sue” is not a real person (“we’ll assume that she’s a real person, but one can’t rule out the opposite”) and that Sue did not start the petition herself (“the web site’s artificially orchestrated efforts”).

It is inaccurate to describe Sue’s petition as “phony” or as Change.org’s “artificially orchestrated efforts.”

Sue launched her petition on Change.org on December 21, 2013. Change.org does not start petitions and does not take editorial positions on any of the campaigns started on our site, including Sue’s petition. Change.org is an open platform, meaning, anyone anywhere can come to the site to start a petition.

It is also incorrect to suggest that Sue isn’t a real person. Our team has had communication with Sue and her identity has been verified by independent journalists who have reported on Staples decision to cut employee hours (see recent BuzzFeed coverage of Sue’s petition here).

I ask that you to update the headline to correct the assertion that Sue’s petition is “phony” and correct the article to indicate that Sue is a real person who started her own petition on Change.org.

PJ Media has posted that email and its official response, with my input, at the end of the column (revised to read as follows earlier today):

Mr. Blumer responds that he’s entitled to his opinions and stands by his assertions. — The PJM Editors

I wish to elaborate further here. The following assertions are mine and not PJ Media’s.

The short version is: “I stand by my opinions and assertions.”

The longer version follows, and refutes Change.org’s three objections.

1. Change.org claims that “Sue is a real person,” and that I should remove by qualifying language.

The column states that “we’ll assume that she’s a real person, but one can’t rule out the opposite.” There is nothing wrong with that statement. Change.org says she is real, but I still can’t prove that she is, and won’t be able to unless and until “Sue” fully identifies “herself.”

2. Change.org claims that “it is inaccurate to describe Sue’s petition as ‘phony.’”

Besides being my opinion, to which I am entitled, I contend that the petition is “phony” based on at least three items.

First, there’s “Sue’s” pose as some kind of uninformed affected person in the email compared to the detailed knowledge presented in the online petition itself (there should be no variance between the two).

Second, her email demands that Staples “comply with Obamacare” when there is no evidence that the company has broken any law or intends to.

Third, her characterization of the 30-hour rule as a “loophole,” when it’s been known for almost four years. The law’s drafters clearly thought that the 30-hour rule was a way to force companies to cover more people. That it isn’t working out that way doesn’t make the 30-hour rule a “loophole.”

All three items represent clear examples of phoniness.

3. Change.org claims that “It is inaccurate to describe Sue’s petition as “artificially orchestrated.”

Besides being my opinion, to which I am entitled, my contention is based primarily on the following two points.

First, the Wired article to which I linked indicated that Change.org is “not just a path to The People. It’s a Google-like Big Data play.” In other words, it sends unsolicited emails to targeted prospects who have ever signed a Change.org petition based on what the company has gone out and learned about those prospects once they coughed up their name and email address. That is artificial orchestration.

Second, the content of “Sue’s” email differs materially from the content of the actual petition text. To name just one example, the email is about making Staples “comply with the law,” while the petition page’s text makes no such inference. So the email ropes people in with inflammatory language in which falls off in what it supposed to be the mirrored text at the web page. That is more artificial orchestration.

Thus, I stand by my opinions and assertions.

Phony Change.org Petition Protests Cuts to Part-Timers’ Hours at Staples

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 6:59 am

Picking on the wrong target.


This column went up at PJ Media and was teased here at BizzyBlog on Tuesday.


An email from “‘Sue’ via Change.org” hit my inbox on Saturday, asking me to sign her petition.

Change.org itself is a fundamentally shady, personally invasive for-profit operation posing as a charitable petition-generating platform to “empower people everywhere.” For this column, let’s stick with what “Sue Whistleblower,” who says she won’t use her real name because she claims to be “afraid I’ll lose my job for what I’m about to tell you,” wrote.

“Sue” — we’ll assume that she’s a real person, but one can’t rule out the opposite — is “heartbroken” that big-box retailer Staples, her employer, decided in early December that effective with the week ending January 4, 2014, “part-time associates should not be scheduled to work more than 25 hours per week.” Staples has also informed managers that because of this move, they “may need to hire additional associates to ensure optimal staffing levels.”

“Sue” asserts that the company “decided to cut part-time employees’ hours just so they won’t have to provide health care benefits under Obamacare.” Although the company’s internal instructions to store managers are silent on the topic, it’s reasonable to believe that Obamacare’s long-known and widely known “employer mandate” was a major factor in the policy change. Under that mandate, employers with more than 50 workers must provide health insurance to anyone who puts in an average of 30 or more hours per week — a new and unprecedented definition of “full-time employee” — or pay a fine of $2,000 per uncovered employee (after an exemption for the first 30).

Thus, Staples has joined the 389 entities whose announced decisions to cut part-timers’ hours compiled at Investor’s Business Daily can arguably be tied to the employer mandate.

The Obama administration continues to insist that there is no discernible Obamacare-driven movement towards part-timers, and that the Everest-like mountain of accumulated evidence is merely “anecdotal.” That’s interesting, and two-faced. Knee-jerk leftist and lead administration apologist Paul Krugman, reacting to one person’s allegedly successful encounter with HealthCare.gov in October, repeated a statement he has been making for years: “[T]the plural of anecdote is data.” The fact is that few firms have publicly admitted Obamacare’s influence to avoid the leftist mob’s intimidation campaigns. One which has taken a public stance, but is not on IBD’s just-cited list, is Whole Foods. Over time, it will move 4,000 employees, or 5 percent of its workforce, from full-time to part-time specifically as a result of Obamacare.

That’s a lot of anecdotal “data,” Paul. Overall, part-timers have increased in number by over 2.6 million during the past 73 months. Meanwhile, full-time employment, still almost 4.6 million shy of it pre-recession peak, has been stuck at barely 47 percent of the adult population for four years — down from 52 percent when the recession began.

Over the weekend, I visited a Staples store where I once worked and asked an associate I know about the situation. That person confirmed that “corporate” had indeed issued the edict, and that certain employees at that store had not handled it well. That person also noted some of them had signed the Change.org petition “Sue” wants employees and members of the public to sign and had informed store management of their move (so much for “Sue’s” alleged fear factor).

“Sue’s” email contains four key deceptions.

1. “Staples doesn’t want to provide health care to its employees.”

Rubbish. Before Obamacare came along, employees needed “to work just 20 hours per week to gain access to most benefits,” including “medical, dental, life, vision and disability insurance.”

The company, whose benefits are also available to “same-sex spouses and domestic partners,” recently received its fourth consecutive perfect score of 100 percent in “a national benchmarking survey and report on corporate policies and practices related to LGBT workplace equality.” The company’s intent to be a leader in perceived employee-friendly policies while providing competitive returns to shareholders appears to be beyond dispute.

2. “Other chain employers such as Darden Restaurants (owners of Olive Garden and Red Lobster) reversed similar cuts after intense public pressure.”

Darden’s alleged reversal was over a year ago, and the company only said that “it would not change full-time employees to part-time positions because of the law.” (By the way, Darden announced in mid-December that it “will spin off or sell Red Lobster [and] stop expanding Olive Garden.” Perhaps the company should have stayed the course.)

As far as I can tell, involuntary bust-downs from full-time to part-time are not the issue at Staples. Its move only affects hours worked by current part-timers who until now had typically put in 26 or more hours per week (only about six at the store I visited), and its future hiring mix.

3. “Sue’s” email dishonestly claims that Staples is “taking advantage of a loophole” in Obamacare, and implies that it is breaking the law when it asks signers to demand that Staples “comply with Obamacare.”

No one can reasonably accuse Staples of not complying with the Affordable Care Act. The company’s quandary is in how it should react to the law while remaining in full legal compliance. Progressives who backed Obamacare’s passage naively assumed that employers would just absorb the costs and burdens associated with the law while making no changes to their personnel practices. They’re angry that companies are doing what they feel they must to stay in business and provide adequate returns to their owners.

If Staples had done nothing, it would have incurred what management must believe are unacceptable additional costs that would seriously cut into the company’s already razor-thin 2.0 percent after-tax profit margin. On the other hand, it could have decided — as many employers surely will in the coming years — that terminating its employer-sponsored health plan, avoiding the higher costs Obamacare has forced into it, and paying the $2,000 per employee fine would be easier and less expensive. Unfortunately for “Sue,” who in nine years at the company remained a part-timer in her store’s Easy Tech Department, the company has chosen, from all appearances reluctantly, to adapt to Obamacare by protecting the benefits of its truly full-time staff. Staples is far from alone in doing this.

4. “Sue,” who says she “recently got married and … (has) a baby on the way,” acts as if she’s been blindsided.

Contradicting this pose, her email betrays a detailed preexisting and ongoing knowledge of the 30-hour issue. The online petition itself has revised its second-last paragraph to note that “our Government has also delayed the requirement until 2015,” but “somehow” forgets that full-time determinations will be based on hours worked during 2014.

The online petition, whose content differs significantly from the email and pretends that “Sue’s” knowledge came about because of “a little digging,” also mentions H-E-B, a company which almost no one outside of Texas has heard of, as another firm which has apparently tried to appease the mob.

The point is that “Sue” appears to be engaged enough to have anticipated this likely move by her employer, but didn’t plan for it. Whose fault is that?

I believe that Change.org’s petition targets would generally be wise to shrug off the web site’s artificially orchestrated efforts as meaningless noise. That would include “Sue’s” scurrilous screed against Staples.

Thursday Off-Topic (Moderated) Open Thread (011614)

Filed under: Lucid Links — Tom @ 6:05 am

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

Positivity: USA Today to Obama admin – Leave Little Sisters alone

From Washington:

Jan 14, 2014 / 04:34 am

The editors of USA Today have urged the Obama administration to stop trying to require the Little Sisters of the Poor to abide by the federal contraception mandate in violation of their religious beliefs.

“When the Obama administration picked a fight with Catholics and other religious groups over free birth control coverage for employees, sooner or later it was bound to end up doing battle with a group like the Little Sisters of the Poor,” the USA Today editorial board said.

In a Jan. 12 editorial entitled “Obamacare overreach tramples Little Sisters,” the publication’s editors argued that the administration’s move is “a political loser,” “constitutionally suspect” and “ultimately unproductive.”

The Little Sisters of the Poor have worked for 175 years to care for the low-income elderly and dying in communities throughout the U.S.

The community says its work is now being threatened by the federal contraception mandate, which was issued under the Affordable Care Act and requires employers to offer health insurance plans covering contraception, sterilization and some drugs that may cause early abortions.

The religious congregation on Dec. 31 secured an emergency stay from the U.S. Supreme Court against the mandate. The Obama administration responded by reiterating its commitment to the mandate and its requirements.

USA Today said the administration is “now stuck arguing that it is justified in compelling nuns who care for the elderly poor to assist in offering health insurance that they say conflicts with their religious beliefs.”

The publication said the administration wrote its religious exemption to the rule “so narrowly” that it failed to exempt Catholic and other religious hospitals, colleges and charities. The Little Sisters of the Poor fail to qualify because they are not affiliated with a particular house of worship.

The Obama administration “could find some less divisive way to provide the coverage,” USA Today said. “Instead, the administration is battling Catholic bishops and nuns, Southern Baptists, Christ-centered colleges and assorted religious non-profits that filed challenges across the country.”

Rather than extending a religious exemption to the Little Sisters, the federal government has instead offered an “accommodation” under which the sisters can sign a document authorizing an outside group to provide the coverage they find morally objectionable.

However, the USA Today editors dismissed this accommodation as “more of a fig leaf than a fix.” They observed that the Little Sisters of the Poor and others say that the requirement “makes them complicit in an act that violates a tenet of their faith.”

The punishment for noncompliance with the mandate is “ruinous fines,” with the Little Sisters facing $4.5 million in annual fines for just two of their 30 homes.

USA Today noted that most of the legal cases against the mandate have been successful so far. More than 300 plaintiffs have filed lawsuits against the mandate, and legal injunctions have been granted in most cases, which are largely still working through the court system.

“The administration should take the hint,” the editorial said, calling on the federal government to adopt the “most expansive” religious exemption. …

Go here for the rest of the story.