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The official U.S. Labor Department jobs report comes out Friday morning and HousingWire will have it, but in the meanwhile a series of economic indicators and events suggest a continued weakness in the U.S. economy.

(As reported at HousingWire, jobless claims were down slightly for the week and on a rolling four-week average.)

1) Factory orders down, inventories are up

The first indicator is that factory orders fell 0.7% following a downwardly revised 2% decline in December. This marks the third month in a row that factory orders missed expectations.

More troubling, inventories continue to rise, climbing nine of the past 10 months to the highest level since the Census Bureau began tracking factory orders. 

Machinery also showed a decline in January, along with electrical equipment and furniture, the latter two of which are tied to housing.

Also revised lower in the same report was the ex-transportation reading for January, to a slim plus 0.2% vs an initial reading of 1.1%. Non-durables showed a 0.4% decline on weakness in chemical products.

Shipments fell 0.3% for a second month in a row while inventories rose 0.2%, a moderate build but enough, given the weakness in shipments, to raise the inventory-to-shipments ratio one notch to the heavy side to 1.30.

The trendline for factory orders has been flat at best.

2) Job creation is still way off

Friday’s official job creation report will tell the tale more specifically, but a second troubling indicator just before the jobs event is news today that Staples Inc., forecast another quarter of sales decline and the company said today it would close up to 225 stores in North America by 2015.

Normally one chain retailer closing stores is not noteworthy, but this seems relevant because Staples is the largest U.S. office supplies retailer, and the closures represent 12% of the company’s locations.

According to the report, brighter views of the economy and personal finances helped make up for increased pessimism about the buying climate as households received higher home-heating bills and paid more to fuel their cars.

Notably, a report Wednesday from the Institute for Supply Management showed a measure of employment in services industries fell in February to the lowest level since March 2010.

3) Confidence is misplaced

Despite the overall weakness of the economy, today’s report on consumer confidence showed continued improvement, marking its fourth straight week of gains and bringing Americans' views of the state of the economy to a near seven-month high. The Bloomberg Consumer Comfort Index was minus 28.5 in the period that ended March 2, the strongest reading since the first week of January and up from minus 28.6 the prior week.

However, some of that confidence may be misplaced, as it arises from periodic stock market rallies and political talk of raising the minimum wage – the latter of which is highly doubtful in an election year. Bloomberg’s report says that the stock-market rally and higher property values helped lift moods of the wealthiest Americans, while talk in Washington about raising the minimum wage may have boosted spirits among those at the other end of the pay scale.

Data yesterday from the ADP Research Institute showed companies hired fewer workers than projected, a sign employers were waiting for a boost in demand before increasing headcounts.

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