US Economy: Consumers Optimistic as Jobless Claims Hit 4-Year Low

US Economy: Consumers Optimistic as Jobless Claims Hit 4-Year Low

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Things continue to be looking up for the US economy: in the same week that new jobless claims hit a four-year low of 351,000, the Bloomberg Consumer Comfort Index neared a four-year high as Americans regained their optimism. (STAY AHEAD OF THE CURVE: Follow Kapitall on Twitter)

New jobless claims fell 2,000 in the latest week to 351,000, which is the lowest since March 2008. To add weight behind the number, the 4-week moving average (a less volatile reading) is also at a 4-year low of 354,000, down from 359,500.

“Firing is not holding back the labor market,” said Ryan Sweet at Moody’s Analytics Inc. to Bloomberg. “Businesses recognize that they don’t need to lay off any more people. Down the road, they’re going to realize they need to hire more people.”

Perhaps to little or no surprise, consumer confidence is also near its 4-year high, with the Bloomberg Consumer Comfort Index at -38.8, the "third straight week above minus 40, which is the level associated with recessions and their aftermath," according to Bloomberg.

It appears that increases in oil prices, which have a negative impact on consumer sentiment, have been offset by improvements elsewhere such as the jobs market.

Business Section: Investing Ideas

Do you think the US economy will continue to see improvements like this? If so, we ran a screen on stocks that may be well positioned to benefit from continued economic growth.

We ran a screen on the S&P 500 for stocks that are technically oversold, with RSI(14) below 40. We then screened these names for those with impressive profitability, with higher TTM gross, operating, and pretax margins than their industry averages.

Do you think these stocks will reap the benefits of greater US economic growth?

Use the Turbo Chart to Compare the Performance of the First Two Companies in the List to the S&P 500:


“1. Exelon Corp. (EXC, Earnings, Analysts, Financials): Operates as a utility services holding company in the United States. RSI(14) at 38.64. TTM gross margin at 30.99% vs. industry average at 26.59%. TTM operating margin at 23.93% vs. industry average at 18.19%. TTM pretax margin at 20.88% vs. industry average at 13.71%.


“2. Nicor Inc. (GAS, Earnings, Analysts, Financials): Engages in natural gas distribution business in the United States. RSI(14) at 34.31. TTM gross margin at 29.68% vs. industry average at 22.67%. TTM operating margin at 21.73% vs. industry average at 13.61%. TTM pretax margin at 13.3% vs. industry average at 10.73%.


“3. General Mills, Inc. (GIS, Earnings, Analysts, Financials): Manufactures and markets branded consumer foods worldwide. RSI(14) at 35.01. TTM gross margin at 40.26% vs. industry average at 31.81%. TTM operating margin at 16.1% vs. industry average at 11.62%. TTM pretax margin at 14.55% vs. industry average at 9.23%.


“4. Wal-Mart Stores Inc. (WMT, Earnings, Analysts, Financials): Operates retail stores in various formats worldwide. RSI(14) at 36.95. TTM gross margin at 26.84% vs. industry average at 24.82%. TTM operating margin at 5.96% vs. industry average at 5.5%. TTM pretax margin at 5.46% vs. industry average at 5.16%.



(Written by Alexander Crawford. Profitability data sourced from Fidelity.)


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