Morning Coffee Aug 06 2012

Job Growth May Boost Consumer Spending

By Beecher Tuttle

Those hoping consumer spending may be on the mend got some positive news from last week's jobs report. The U.S economy added 163,000 jobs in July, with growth outpacing forecasters' expectations by more than 50% on the back of strong gains in the food services and entertainment industries.

Growth in those industries often signifies an uptick in discretionary spending – a strong sign for future economic growth, analysts told USA Today. Employment in manufacturing and professional and business services is also on the rise.

Better-than-expected job gains in July couldn't put a dent in the unemployment rate, which hasn't dropped below 8% since early 2009. Between 150,000 and 200,000 jobs need to be added per month to lower the unemployment rate, Fed Chairman Ben Bernanke noted earlier this year.

"Today's numbers are better but not good enough," Brian Jones, a senior U.S. economist for Societe Generale, told Bloomberg. "We're stuck in a channel of lackluster growth."

As in previous months, nearly all the job growth occurred in the private sector as state and federal governments continue to make budget cuts.

Sales Buzz

Walgreens Adds Jobs (Chicago Tribune)

Walgreens will leverage corporate income tax credits and state training funds to add roughly 500 jobs in Illinois over the next three years.

Service Companies Rebound (AP)

The U.S. services sector, made up of companies in industries like retail, construction, health care and hotels, saw modest growth in July after nearly bottoming out the previous month.

Tuesday Morning ex-CEO Files Suit (WSJ)

Kathleen Mason, the former chief executive of home-furnishing retailer Tuesday Morning, has filed a discrimination complaint against the company, alleging that she was fired due to her breast cancer diagnosis, not because of performance reasons.

Marketing Buzz

Ad Woes Don't Fret CBS (WSJ)

CBS overcame a 3% drop in ad sales in the quarter ended June 30 due to an uptick in programming fees paid by cable operators. The network booked an 8% increase in profit for the quarter.

Poor Ad Sales Hurt Viacom (Bloomberg)

Broadcaster Viacom missed Wall Street expectations on the back of a 9% dip in ad sales, representing the largest such drop in more than three years.

Executive Shuffle (Ad Age)

The New York office of agency Saatchi & Saatchi is turning to Durk Barnhill, president of Taxi, New York, as its new chief executive. Barnhill will replace Mary Baglivo, who will shift to the role of chairman-CEO of Latin America and multicultural.

TV Spots Favor Google (Ad Age)

The U.S. and China aren't the only ones doing battle during the Olympic Games. Apple and Google have been airing competing commercials, and it looks like Google is going to bring home gold.

Buzz Around the Office

A Guilty Conscience Needs No Xbox (

A burglar who couldn't handle the guilt of stealing electronics from a Canadian family's home returned the goods the next day along with a written apology, a $50 bill and a promise to conduct 15 hours of community service to "partially help atone" for the mistake.

List of the Day: Getting Ahead

If you want a promotion, you're going to have to earn it.

1. Do your current job better. Even if you hate it.

2. Make allies with the right people.

3. Volunteer to help with things not in your job description.

(Source: Forbes)

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