Jeremy Hobson: The government said this morning that the number of Americans applying for unemployment benefits ticked up slightly last week to 362,000. The four week average remains near the lowest level in four years. Tomorrow the labor department will give us the February Jobs report which will tell us how many jobs were added and what the new unemployment rate is.
And jobs are where we'll start with Diane Swonk, chief economist with Mesirow Financial. She's with us live as always from Chicago. Good morning Diane.
Diane Swonk: Good morning.
Hobson: So some good news this morning on the job front and we also heard from the job placement firm, Challenger, Gray & Christmas that the number of planned layoffs was up last month which doesn’t sound great but here’s what CEO John Challenger told us about it:
John Challenger: Companies are making decisions, they’re not just waiting it out, so it’s a healthy sign especially because the job creation has been trumping the losses. That’s a sign of a more energetic, active economy.
Hobson: An "active economy" -- is that your view, Diane?
Swonk: Well it’s maybe active on a walker but we are moving forward and that’s the important issue and I think the point here is one that we saw in the 1990s. The Fortune 500 downsized the entire 1990s yet we had a job boom out there as new businesses were created and we are starting to see in some of the different unemployment reports that new business formation is starting to pick up. That may be something as simple as someone who works for a large company now consults at that large company and the company moved to get that flexibility, hiring back people as consultants or outsourcing innovative niche technologies and some of the medical sector where they’re using smaller companies to get that innovation rather than doing it in house.
Hobson: Alright well let’s talk about something else that happened this morning. McDonald’s came out and said that same store sales were up 11 percent here in the U.S. last month and just 2 percent higher in Asia. What’s going on there?
Swonk: I think you’re seeing the rebalancing of growth. The U.S. is reaccelerating although not rapidly and it’s pushing people downstream in terms of where they eat. On the other side of it, Asia’s been a really big strong market for McDonald’s and because it’s such a global player, when you see major shifts in the growth pattern, you start to really pay attention to it. It’s showing that Asia’s having a spillover effect from the weakness we’re seeing in Europe and now Asia and many of the emerging markets are concerned about how much they’re going to slow their growth.
Hobson: Does McDonald’s really tell us a lot about the economy or whether people just kind of like Big Macs or Quarter Pounders better?
Swonk: I actually think because of the placement of McDonald’s it does show some movement in terms of where people are trying to find value in the economy and more broadly, because it’s an international company, these changes we see in growth across regions, major regions of the world are really important so it is an indicator that is worth watching out there.
Hobson: And finally, quickly Diane, there is this deadline happening later today -- these Greek bond holders have to decide if they’re going to accept big losses on their investments and if they don’t, it could trigger a messy default in Greece. What do you think, what’s going to happen, how important is this?
Swonk: It’s important and I don’t think they have any other choice. They have no other choice but to move forward and they will move forward, that’s the good news. The bad news is, we’re moving from a crisis situation in Europe to a chronic illness and anyone who’s had a chronic illness knows there’s still a lot of crises down the road.
Hobson: Diane Swonk, chief economist with Mesirow Financial, thanks as always.
Swonk: Thank you.