Economy adds 209,000 jobs in July
July was a month of exceeded expectations in job creation, which moved the needle by pushing the U.S. unemployment rate down even further.
The economy added 209,000 jobs last month, and the unemployment rate is now down to 4.3%.
The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.8 million in July, and the labor force participation rate has also shown little movement over the last year (now at 62.9%).
The number of persons employed part time for economic reasons was essentially unchanged at 5.3 million.
Additionally, 1.6 million persons were marginally attached to the labor force, down by 321,000 over the last year. And there were 536,000 discouraged workers, a number that's been essentially unchanged over the year.
Of the job gains that occurred last month, the majority occurred in food services and drinking places (53,000), professional and business services (49,000), and health care (39,000).
Employment growth has averaged 184,000 per month thus far this year, in line with the
average monthly gain in 2016 (+187,000). (See table B-1.)
Additionally, the change in total nonfarm payroll employment for May was revised down from +152,000 to +145,000, and the change for June was revised up from +222,000 to +231,000. This means job gains were 2,000 more than previously reported in May and June.
Building material and garden supply stores added 5,000 jobs last month, and residential building added 5,100. Residential specialty trade contractors added 2,100.
Unsettled retail environment taking toll on senior executives pay
Volatility in the retail industry is now hitting senior retail executives in the pocketbook.
Seventy-three percent of retail companies paid little to no bonuses to senior executives in 2017 for 2016 performance, with 35% paying no bonus and 38% paying only small bonuses to their executives, according to new research by Korn Ferry. The company conducted an analysis of 40 North American retailers with annual sales between $1 billion and $50 billion
The study found that the percentage of retailers paying no bonuses to executives has steadily increased during the past five years. Only 15% of the retail companies paid senior executives their target or above bonus amount in 2017.
“Bonuses are typically tied to the performance of the retailer, and historically about 50% of retailers achieve their business plan for profits and pay executives their normal bonuses,” said Craig Rowley, a Korn Ferry senior partner specializing in the retail industry. “The fact that this year only 15% of companies met or beat their expected profit plan and paid full bonuses to executives exemplifies the challenges facing the industry.”
Korn Ferry provided a five-year look at the percentage of retail senior executives who received no bonus:
Stanley CEO on Craftsman and Omnichannel
Stanley Black and Decker, a company whose very name hammers on the trend of industry consolidation, says its recent acquisitions of Irwin, Lennox, and – not least – Craftsman are proceeding on schedule.
“There's a lot of really good things going on relative to Craftsman,” CEO James Loree told analysts. But he couldn’t give a lot of color (analyst speak for “information”) for competitive reasons. Stanley acquired Craftsman from Sears in a complicated deal that closed in March.
Still, Loree did offer the following Craftsman acquisition updates:
• The launch outside of Sears for the craftsman brand will be mid-2018.
• Stanley, he said, is “hard at work developing commercial strategies” for the Craftsman brand, and customer discussions are continuing.
• Plans call for a “complete comprehensive product line that spans all categories.”
• It’s safe to expect about $100 million a year in incremental revenue growth for the foreseeable future, thanks to the addition of Craftsman.
• Craftsman “gets us into gas,” Loree said, pointing to the lack of a gas engine lawn equipment power initiative prior to Craftsman.
Loree also responded to a question on a much broader topic for the entire tool industry: the coexistence of e-retailers and home centers. Loree responded: “We would be foolish to think that it’s not going to a substantial part of market in the years to come. It already is a substantial part of the market.” He said that traditional home centers are already powerful forces in the e-commerce space. “Maybe it all gravitates towards omni-channel at some point,” he added.