Staples earnings fell short of estimates and the stock is off 15% today. Office Depot, OfficeMax and Avery Dennison also had lackluster earnings reports. Office Depot reported a loss and declining sales.
Are these financial reports from the office supply companies a crystal ball to the direction of the economy? Are we really in a recovery as government reports indicate? Government stimulus is ending in June. Federal, State and Local budgets are strained. GDP would have been negative since 1980 without the growth in government debt. Republicans are threatening to shut down the Federal Government unless there are huge cuts in spending. Housing and construction are in the dumps. Consumers are strained with the added burden of high gas prices. Where will the future demand come from to grow the economy? We’ll know by the end of the summer if Office Supplies are an indicator for the overall economy.
Are these financial reports from the office supply companies a crystal ball to the direction of the economy? Are we really in a recovery as government reports indicate? Government stimulus is ending in June. Federal, State and Local budgets are strained. GDP would have been negative since 1980 without the growth in government debt. Republicans are threatening to shut down the Federal Government unless there are huge cuts in spending. Housing and construction are in the dumps. Consumers are strained with the added burden of high gas prices. Where will the future demand come from to grow the economy? We’ll know by the end of the summer if Office Supplies are an indicator for the overall economy.
Having been in "the industry" for over 20 years, and a CPA as well, I have always been able to predict economic increases and decreases months prior to numbers being released from the Federal government. Right now, the industry is suffering in a huge way; with layoffs at companies that had never done so before. W.B. Mason has essentially resorted to cheating their customers with after-the-sale price rises and regular double billing.
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