Unfortunate as production in the US picks up, jobs continues to be a sore spot for the economy. The following chart via Clusterstock continues to point to questions that I've had for Manpower (MAN) which is heavy in the manufacturing sector.
Showing posts with label Manufacturing. Show all posts
Showing posts with label Manufacturing. Show all posts
Thursday, January 7, 2010
Thursday, August 6, 2009
Prospects of a jobless recovery
From Kathleen Pender:
"The prospect of an economic recovery is growing stronger, but so are fears that unemployment could remain high for a prolonged period as it did during the previous two recessions.
If you are a U.S. manufacturer, you can't raise prices. The only way to increase profits is to cut costs," he says. One way to do that is to move production overseas.
Achuthan says that nonmanufacturing employment recovered quickly after the previous two recessions, but those gains were overwhelmed by job losses in manufacturing. "Ten years ago we had 18 million manufacturing jobs. Today we have 12 million.
What's different this time is that consumers, who are deeply in debt and have watched the value of their homes and investments plummet, might spend less than they normally would in a recovery, keeping a lid on job growth.
Another risk: Normally, when a recession includes a credit crisis, "the recovery is steep and drawn out," says Gary Schlossberg, a senior economist with Wells Capital Management. That suggests this recovery will be slow.
Economist Ed Yardeni expects "a very weak recovery in the labor market, even weaker than in the last recovery," he says.
Washington is throwing too many wrenches into the recovery mechanism. In the past it was simple: cut taxes and help the unemployed. We didn't use a recession to change all sorts of policies," such as health care, energy and union elections, he says. All this uncertainty could discourage hiring.
Yardeni also wonders "how we can have a sustainable recovery with the kind of deficits we are projecting. Normally deficits widen in recessions and narrow in recoveries. This time we are looking at structural deficits. That creates another layer of uncertainty."
"The prospect of an economic recovery is growing stronger, but so are fears that unemployment could remain high for a prolonged period as it did during the previous two recessions.
If you are a U.S. manufacturer, you can't raise prices. The only way to increase profits is to cut costs," he says. One way to do that is to move production overseas.
Achuthan says that nonmanufacturing employment recovered quickly after the previous two recessions, but those gains were overwhelmed by job losses in manufacturing. "Ten years ago we had 18 million manufacturing jobs. Today we have 12 million.
What's different this time is that consumers, who are deeply in debt and have watched the value of their homes and investments plummet, might spend less than they normally would in a recovery, keeping a lid on job growth.
Another risk: Normally, when a recession includes a credit crisis, "the recovery is steep and drawn out," says Gary Schlossberg, a senior economist with Wells Capital Management. That suggests this recovery will be slow.
Economist Ed Yardeni expects "a very weak recovery in the labor market, even weaker than in the last recovery," he says.
Washington is throwing too many wrenches into the recovery mechanism. In the past it was simple: cut taxes and help the unemployed. We didn't use a recession to change all sorts of policies," such as health care, energy and union elections, he says. All this uncertainty could discourage hiring.
Yardeni also wonders "how we can have a sustainable recovery with the kind of deficits we are projecting. Normally deficits widen in recessions and narrow in recoveries. This time we are looking at structural deficits. That creates another layer of uncertainty."
Wednesday, June 24, 2009
Manpower Consulting Employment Is Down
So recently I checked the valuations of Manpower, and feel that estimates overly gauge a rebounding sentiment in a possible recovery. Manufacturing has continued to hug the bottom in terms of production, and hours along with most wages have continued to be depressed.
Manpower may have generated billions in sales, yet their profits from this recent quarter tells a more stressing sign.Lets take a look at their most recent reported quarter:
"Manpower Inc. (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2009 were $2.3 million, or 3 cents per diluted share, compared to $75.5 million, or 94 cents per diluted share, a year earlier. "
That's a large free fall in net earnings; yet their stock continues to trade over 22x earnings.
While revenues also took a large hit."Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
"Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
Ask yourself why invest in a company such as Manpower, and the other staffing firm when these valuations are not up to par to their earnings. 22x earnings for a company that just released dire numbers is a cause for concern.
They should continue to cut overhead and continue to find cost controls as their earnings and revenue decelerate.
Manpower may have generated billions in sales, yet their profits from this recent quarter tells a more stressing sign.Lets take a look at their most recent reported quarter:
"Manpower Inc. (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2009 were $2.3 million, or 3 cents per diluted share, compared to $75.5 million, or 94 cents per diluted share, a year earlier. "
That's a large free fall in net earnings; yet their stock continues to trade over 22x earnings.
While revenues also took a large hit."Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
"Revenues for the first quarter were $3.6 billion, a decrease of 32% from the year earlier period, or a decrease of 22% in constant currency. "
Ask yourself why invest in a company such as Manpower, and the other staffing firm when these valuations are not up to par to their earnings. 22x earnings for a company that just released dire numbers is a cause for concern.
They should continue to cut overhead and continue to find cost controls as their earnings and revenue decelerate.
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