Week X - And it marked the Spot... Jobs twice and ISM twice; Triggers, LRI and Beware the Ides of March
The Road that led to last Friday: The Key Numbers
The Institute for Supply Management – ISM, see below, issued its manufacturers' purchasing numbers on Monday. 52.4% this month vs. 52.6% last month.
Anything over 50% means that the purchasing managers are still in expansion mode, so that’s good.
On Wednesday, Automatic Data Processing, aka ADP, issued its employment numbers, and… they went up and were higher than expected. Exhale.
63,000 added, vs. 11,000 for January. Folks were expecting 48,000.
It’s certainly good news for the 63,000 folks who got a new job, but not good news for the financiers hoping that the Fed will cut interest rates.
Remember, the softer the jobs numbers, the more likely the Fed will cut rates.
The ISM reported continued growth for the 20th consecutive month for the purchasing managers of service companies.
It came in at 56.1%, above January’s 53.8% and the highest since July 2022.
The four key categories that drive this score – Business Activity, New Orders, Employment Index, and Supplier Delivery all showed continued expansion.
We’ll see how the March survey turns out, but this is all good news for what businesses are seeing in the economy.
On Thursday, the initial jobless claims came in… right on target. 213,000 last month 213,000 this month. An exhale moment.
And then Friday rolls around, and the U.S Employment Report comes out. Ouch.
A loss of 92,000 jobs when we gained 126,000 jobs the previous month, and we were expecting 50,000.
The stock market did not like that.
The interesting part was where the losses were.
Leisure & Hospitality cut 27,000 jobs. That seems to signal a cutback in consumer spending. This is mainly restaurants, folks.
Healthcare and Social Assistance lost another 19,000 jobs.
That was the first decline in that sector in four years.
The Kaiser nurses' strike had an impact, but it reflects more of an employer hiring adjustment than an impact of strikes.
We’ll see what happens this week.
Beware the Ides of March
Such is the quote from Shakespeare’s Julius Caesar when a seer warns Caesar about ominous events on March 15.
Fortunately, this month, it’s on a Sunday, and two days before St. Patrick's Day.
That said, economic news for the week of the 9th are:
The CPI, which is one of the inflation indexes. Last month, it came in at 2.4%. EVERYONE is looking at this for Wednesday.
The PCE, another inflation index, comes out on Friday. Last month, it was 2.9%
…beware the ides of March.
Don’t Pull the Trigger
Anyone who has applied for a mortgage knows the routine: the moment your lender pulls your credit, the phone starts ringing or texting or emailing or…
As it turns out, credit bureaus would sell the fact that your credit had been pulled to other lenders. They would then try to get your business.
These are called “trigger leads”.
A new federal law, the Homebuyers Privacy Protection Act (H.R. 2808), aims to stop that practice by restricting the sale and use of those trigger leads.
For borrowers, that should mean fewer unsolicited calls, texts, and emails and more privacy during the mortgage process.
The idea is that it would promote a smoother experience with the lender you actually chose.
Oddly enough, it takes the competition, and potential lower rates, off the table.
I definitely have mixed emotions about this.
The law took effect March 5 and is expected to significantly reduce the marketing blitz that has long followed mortgage credit checks.
That’s even less revenue for the USPS.
The company, along with its sister company, hand2mind, are based outside Chicago and were founded in 1916. It is currently run by the founder's grandson.
And the great-granddaughter is running hand2mind.
It’s not a typo – that is how they spell hand2mind.
The logo of Learning Resources is instantly recognizable by parents and teachers; they manufacture educational toys. Why do I bring them up?
They were heavily impacted by the tariffs and the resulting uncertainty, and successfully moved much of their supply chain from China to India.
2025 for LRI turned out to be a very blah year, with time taken to adjust and fight the tariffs. And by ‘fight’, I mean fight.
In an interview, the CEO ceded that it is time to move on. He is trying to lead his team back to a sense of normalcy.
It’s a good lesson that many of us can learn from. After a year of noise, it is time to move on and focus on the business.
And if Learning Resources rings a bell for you, it was the plaintiff in the IEEPA case where the Supreme Court decided in its favor.
Now, how do they collect their tax refund?
Well, it’s been quite a week. If you are a business that relies on gas or diesel to maintain manufacturing and/or deliveries, you need to increase that budget number, unless you have fuel price increases included in your contract. While there may be continued uncertainty with tariffs, the LRI decision should help keep tariffs a little more certain.
The key thing here is that in a world of uncertainty – see Friday’s stock market ride as an example – you absolutely need to keep your focus on your business. If you are in the restaurant business and you are cooking a commodity, your customer experience had better be so good it brings people back. Train your employees and let them know that, as obvious as it may seem, your business depends on people coming back. If the customer is down to the last $20 of their food budget for the week, you want them to come back to you to spend that $20.
When it comes to your employees, no matter what your business is, “Inspect what you expect.” Make sure your employees are doing what you expect them to do, to keep the customer retention as high as possible.
And that is the quote of the day.
