Record Number Of Retail Store Closures Doesn’t Bode Well For U.S. Economy

From Tony Sagami: President Trump has promised to create 25 million new jobs over the next decade, but the jobs numbers for the month of March suggest it’s not going to be easy.

Indeed, the numbers reported by the Bureau of Labor Statistics (BLS) last Friday were … well … quite disappointing.

According to the BLS, our economy created 98,000 new jobs in March, well below the 180,000 that Wall Street was expecting and the 219,000 created in February.

That is a pretty dismal number, but the unemployment rate did drop to only 4.5%, a 10-year low. Ironically, the number of newly unemployed surged by 472,000, which makes me wonder what kind of statistical magic BLS used to come up with that 4.5% number.

What was the weakest part of the jobs market? The retail sector, which lost 35,000 jobs in March.

By the way, that is on top of the 26,000 retail jobs that disappeared in February. Moreover, the job situation is going to get worse.

“We know that job cut announcements were the top category in the first quarter. That just means there’s more pain to come,” said Mark Hamrick of Bankrate Monitor.

In fact, the number of retail store closures in the first three months of 2017 is already higher than ALL of 2008, the start of the painful Financial Crisis. So far, almost 2,800 retail stores have announced that they will shut their doors for good.

  • J.C. Penney: closing 138 stores
  • Kmart: closing 108 stores
  • Sears: closing 42 stores
  • H.H. Gregg: closing 88 stores
  • Macy’s: closing 68 stores
  • MC Sports: closing 68 stores
  • Gander Mountain: closing 32 stores
  • Radio Shack: closing 187 stores
  • Payless Shoe Source: closing up to 500 stores

Maybe you’re thinking: “Ah, who cares? Retail jobs barely pay above minimum wage so the job losses really don’t matter.”

Wrong! The National Retail Federation claims that one out of every four jobs in the U.S. is retail related, so we’re talking about one of the most important job markets.

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Moreover, since approximately two-thirds of the U.S. economy is consumer spending, you have to wonder if these retail job losses are a canary in the bigger economic-picture coal mine.

According to the Atlanta Federal Reserve Bank — which just lowered its first-quarter GDP-growth forecast to a pathetic +0.6% — the combination of weak auto sales and ongoing decline in consumer activity is slowing the economy down to a crawl.

The next economic release that you need to pay attention to will be on Friday, April 28, when the Bureau of Economic Analysis will release its first official GDP number.

You can bet that whatever the Q1 GDP number is — good or bad — it will be market moving. MAJOR market moving.

Based on the above numbers, you should be able to connect the dots and be prepared for what’s coming. These are dangerous, but exciting times. and there are a couple little-known, specialty ETFs that I expect will take off like a rocket.

The SPDR S&P Retail ETF (NYSE:XRT) was unchanged in premarket trading Wednesday. Year-to-date, XRT has declined -3.56%, versus a 5.16% rise in the benchmark S&P 500 index during the same period.

XRT currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #33 of 45 ETFs in the Consumer-Focused ETFs category.


This article is brought to you courtesy of Money And Markets.

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