Mass Layoffs Nov 2009

23 12 2009

Yesterday, the Department of Labor Bureau of Labor Statistics released the November Mass Layoff Report.  The news was upbeat in that the trend continues to get better (meaning fewer mass layoff events) with only 1,797 events.  We have spoken about 2,000 events as being extremely high and November was the first time in the last 14 months that the number dropped below 2,000.  The bad news is this is still higher than 80% of the monthly numbers since 1999 so the numbers are again not positive, just less negative.

One bit of interesting news is that the number of layoffs (officially claimants) per event was at one of its lowest levels since the beginning of 1999.  This means that while the number of layoff events is still high, there were fewer claimants per event (fewer people laid off or more found something else), or that instead of 200,000 claimants, we saw only 165,346.  This number is a healthier indicator than the number of events (see the dotted red lines in the chart below and compare the crimson line and the blue line from the chart above).

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Consumer Price Index – October 2009

20 11 2009

Yesterday the US Department of Labor – Bureau of Labor Statistics released the October report on the US Consumer Price Index (CPI).  Not all that surprisingly, the number rose .27% following last months .17% growth.  This marks the six straight month of growth in the CPI and that the Index is returning to the trend line prior to the October disruption.

In the chart below are two parallel lines marking a rough trend of the CPI.  It appears as if the steady growth rate is returning.  This is at least an indication that the economy is stabilizing.





Mass Layoff Events October 2009

20 11 2009

Today the US Department of Labor – Bureau of Labor Statistics reported the October Mass Layoff Events (here are the Sept and Aug blogs).  We have watched this since late last year when the number of events crossed the 2,000 mark.  This marks our 14 month in a row where we have exceeded that level.  While this is still an alarming rate of Layoff Events at least we can say that the trend could be moving in the direction of dropping below the 2,000 next month.

I still have concerns about the state of the US Economy as we approach the end of the year.  If I were to guess, I think we will see this number drop below 2,000 for November, but return to greater than 2,000 in December and/or January.





Employment Situation Oct 2009

6 11 2009

The employment situation continues to demonstrate the frailty of the current economic climate.  In Sept the unemployment rate was 9.8%, Friday it was announced that Oct witnessed this number increase to 10.2%.  “This is the highest rate since April 1983.”  We are also at the second highest point (and growing) in the history of tracking the data – 1948.

(Here is the link to the commissioner’s report to Congress and the original report)

Employment Situation Oct 2009

If we look at a visual of the informtion, a number of things jump out at least to me:

1.  The Good, it looks like (at least to me) the higher the number, or the swifter the increase, the quicker the the unemployment rate drops.  There appears to be a natural slope (green line – A) to the decline in the the unemployment rate after a spike, which then is followed by a less gradual slope that marks a return to a healthy market (red line – B).  In roughly 1975 and again in 1983 we saw two spikes which then followed the green line’s slope – except in the case of 1983, we actually saw that trend bear out over the longer term, yet moved faster during the initial recovery period (reb box).

2. The Bad – if this follows the trend pattern of 1983 we may be looking at another 7-8 year recovery process to return the unemployment rate to around 6% which roughly appears to be natural healthy level.

3. The Ugly – We have yet to see the peak of this trend.  And even if this does turn around in the next month or two, we are so bad a shape across so many other sectors it may take far longer for us to return to a 6% unemployment rate.  If we continue to see credit tighten up at the rate it is going, we will see continued pressure on unemployment.





Consumer Price Index Sept 2009

15 10 2009

The CPI for September was released today.  Nothing all that surprising – it looks like the rebound last month towards a positive trend (perhaps not for everyone), or an upward trend continued for a second month.  It appears as if the trend may be resetting with a 1.3% drop from where we were in Sept 2008.

CPI History 1997

How to use this information:  Have your internal statistician look at CPI (and PPI) and see if they give you any early warning signs against some of your variable costs – raw materials, finished goods, average selling price, etc.

  • Does CPI move with your Cost of Goods Sold (COGS), or your margins?
  • Could it give you a one month warning to tighten the belts a little bit?
  • What is the impact on your average selling price?
  • Do your customers move faster than you?

Historical Trends

If we look at this from a historical perspective, we can tell there has been a stead upward trend since the mid 60’s.  The variability was pretty consistent from the mid 60’s through 2004, then in 2005 it looks like the variability began to increase.  These charts don’t provide us much actionable information, but show us the trend has been consistent, and that there was a disruption with the recent economic conditions.  This disruption is what is highlighted in the earlier part of this blog.

CPI History 1913





Mulligan

23 07 2009

If you were given a corporate mulligan, how would you use it? What would stop you from doing it over?

Or think of it a different way…

How would your competition use your product platform, your assets, your customers to take advantage of you?  What happens if you push all of your unprofitable customers over to your competition?  Let them deal with the headache, the loss of time and money.

One of the most interesting thing about this current economic environment is that there is a new entrepreneurial spirit.  With this brings new technologies, new business models, etc.  Would GM and Ford take a mulligan when Toyota entered the US market?  Take a look at Blockbuster.  Did they see Netflix coming?  If they did how could they have reacted?

Can someone do this to you?





What goes up…

22 06 2009

“Mama don’t take my Kodachrome away” – well she didn’t, but customer demand finally did.

Monday June 22nd, 2009 – today marked the end of Kodak’s Kodachrome product.  After a 74 year run, Kodachrome only makes up less than 1% of Kodak’s revenues today.  While this clearly is another example that film is dead, it has bigger implications for performance.  Nothing lasts forever, brands will come and go.  It takes tremendous effort to get your brand to the top, but far more to keep it there.  Not only do you have your traditional competitors, but markets change, morph, and die all the time.

  • When was the last time you thought about what new products your competitors were launching?
  • Are you revolving or evolving the brand?
  • When was the last time you did a little Blue Ocean thinking?
  • Where are your biggest threats coming from tomorrow?
  • What is your process to identify these issues?
  • How tied are you to your infrastructure?

If you want to stock up before it fades away…

Who knows…someday you will find this on something like a Retro Ebay where oldies, but goodies go to never die.