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Steve Chiotakis: Department Store Kohl’s today reported a 3 percent dip in its profit for its second quarter. And we learned from the Commerce Department this morning that retail sales were basically flat for July — down 0.1 percent. Analysts were expecting a small rise. That was a bit of a surprise. Let’s get one take on that report. Bill Stone is Chief Investment Strategist at PNC Wealth Management. He’s joining us live this morning from Philadelphia. Good morning Bill.
Bill Stone: Good morning.
Chiotakis: All right, disappointing retail sales. I thought the Cash for Clunkers were buying lots of cars. You’ve got the Federal Reserve telling us we’re out of intensive car. But it sure looks like to me that we’re still with blood pressure here.
Stone: I think you’re right. You know the one thing we can say is the Cash for Clunkers did work in the sense that we know auto sales were up 2.4 percent. I guess the downside is it seemed to steal sales from somewhere else.
Chiotakis: First-time jobless claims, Bill, unexpectedly rose last week. How do you jibe thoughts of an economic recovery when companies aren’t finished shedding jobs?
Stone: Well I think one thing we know is at least we can still say the pace of decline is getting a little bit slower. So kind of it’s a classic signal that you’re getting to the end of a recession when you see less initial jobless claims, we’re off the peak there. I think you can take at least some solace in the continuing claims being down, significantly lower.
Chiotakis: So we keep hearing that less bad scenario, right?
Stone: Exactly. And that’s why I think that when you look at the Fed’s statements, they were only willing to say that the economy was leveling out.
Chiotakis: Hey, and quickly let’s talk about Europe this morning and its economic health. Germany and France reported some growth in their GDP. What are they doing there that we’re not doing here?
Stone: Well they were helped by some exports, but I think it’s probably more of a — it was just slight growth and I think it’s more of a timing issue. We do expect some good growth out of the United States here in the third quarter actually.
Chiotakis: All right. Bill Stone. Thanks for joining us this morning. We appreciate it.
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