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More Bad Signs for US Economy

Tuesday, 17 May 2011 | 11:25 AM ET

A deceleration in the US economy. Whether you are looking at today's April Industrial Production, Capacity Utilization, or housing starts and building permits, the economic data was all weaker than expected.

Home Depot posted a negative same store sales number, even though they raised full year guidance. Wal-Mart posted a negative comp, again.

The stock market may be just off new highs, but the country doesn't believe it, and with good reason: no significant job growth. There was a chart I saw a short while ago. It was the number of jobs relative to the number of people in the country, and it showed that it was still in a trough.

I'm not talking about how many people are looking for jobs, but how many jobs are there relative to the number of people in the country...it hasn't really recovered meaningfully. So there isn't a lot of jobs out there, still.

The unemployment number is deceptively light — I don't care what sub-metric you're looking at: stopped looking for work, underemployed, it doesn't matter. We've lost a lot of jobs, and haven't gained them back.

The economy is robust in some spots, and dead in others. White collar, higher end jobs are doing better...and that is showing up in better stats in the higher-end retailers...while lower end are still seeing no job growth.

I'll give you a simple metric: for a robust recovery, you would want to see same store sales go positive for the biggest retailer in the country, Wal-Mart. They have been putting up negative same store sales for over a year.

(But one market pro is optimistic. Read: Why Wal-Mart Still Looks Attractive)

It's not like they are mis-executing. There is only so much you can do. If people aren't working, they're not working. If you took down unemployment a few percent, Wal-Mart would be doing a heck of a lot better.

So here's what we have: Saks leading the recovery, Wal-Mart lagging the recovery. But Saks is a good measure of the New York economy. It's not a good measure of Arkansas or Nebraska or Missouri.

It's not all bad. Wal-Mart is less bad sequentially. Food sales were good. TJX sales were up 2 percent, which is fair for a discounter.

And cash-flow wise, corporate America is in really good shape. But Americans are cynical about corporate America.

"Yeah, sure, corporate America is in really good shape," one hedge fund trader said to me. "Because they fired everyone."

Comp store sales: high end accelerating, low end struggles

Saks: 10.2%

Nieman Marcus: up 9.8%

Nordstrom : 6.5%

Macy's: 5%

Dillards: 2.0%

Kohls : 1.3%

Wal-Mart down 1.1%

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  • A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

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