The Next Five Days: Rust Belt Renaissance

Much of the potential manufacturing renaissance will hinge on November's presidential elections. Both Democratic candidates appear inclined to support legislation that gives favorable tax treatment to the creation of U.S. jobs. Senator McCain's stance on the matter is less clear, but he'd be hard-pressed to veto any legislation that is deemed favorable U.S. workers.

The (Jobs) Trend is Not Your Friend

On Friday, April 3, the employment figures will be released. Various consensus estimates are calling for 40,000-50,000 in fresh job losses in March. If the consensus is correct, then it would represent an improvement from the 63,000 jobs lost in February. The trouble is that metric has been in decline for four straight months, falling an average 40,000 per month sequentially.

So, I'm hard-pressed to understand why economists think we've hit bottom on the employment front. If anything, economic downturns of the current magnitude typically imply job losses moving into the six figures. I guess hope springs eternal.

Keep an eye out for the Civilian Labor Force figures in the upcoming report. After maintaining steady levels in December and January, the labor force shrank by a stunning 450,000 in February. That's the biggest one-month drop since 2001. If March's labor-force participation rates drop by a similar amount, then you can expect more pain in the retail sector this spring.

Another area I'll be addressing will be themes from the upcoming earnings calendar. Of notable interest for the coming week is Best Buy (BBY - commentary - Cramer's Take), which is expected to report fourth-quarter results on Wednesday, April 2.

The fact that Best Buy's fiscal 2008 earnings are expected to be up 10% from a year ago is impressive in a challenging economy. The electronics retailer surpassed estimates by at least 25% in each of the last two quarters, so perhaps another upside performance is in the offing.

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David Sterman has been an equity analyst and financial journalist for 15 years, most recently serving as Director of Research at Jesup & Lamont Securities.