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While there's no question the economy is beginning to recover from the worst recession since the Great Depression, with GDP increasing by six percent in the fourth quarter, data released today shows that the recovery is far from a strong one.

The Department of Labor reported that initial unemployment claims declined by 6,000 to 462,000.  The four week moving average came in at 475,500, which was an increase of 5,000 from the previous week's figure.  Continuing claims increased by 37,000 to 4.558 million, and the four week moving average here was unchanged at 4.581 million.

Eight states reported a decrease of more than 1,000 claims, with Pennsylvania's drop of 4,772 leading the way.  On the down side, four states reported claims increased by more than 1,000, with California's increase of 16,112 claims the highest.

Analysts had expected initial claims to decrease slightly more than they did, with the consensus estimate for a drop to 460,000.  Estimates ranged from 440,000 to 480,000

Not surprisingly, the less than stellar job market translates into higher foreclosures.  Many people live paycheck to paycheck and when they lose their jobs, they can't pay their mortgages.  That was shown by a report from RealtyTrac, which said that foreclosures increased by six percent in February from the year ago period.

While the increase in foreclosures was the slowest rate of increase in four years, it's still an increase and some of it may be due to delays in processing claims due to the severe winter weather that hit much of the country in February.  And RealtyTrac's CEO said that the data doesn't show that fewer homeowners are at risk.  Instead, he said, foreclosure prevention programs, legislation, and processing delays may be capping the number of monthly foreclosures.

Not surprisingly, the worst markets for foreclosures were the ones who saw the biggest run up in the bubble.  Las Vegas was the worst market, where one in 90 properties is in foreclosure.  That helped put Nevada at the head of the list of states with high foreclosure rates, with one in 102 homes suffering that fate.  Arizona and Florida were next, with one in 163 homes in foreclosure.

There is likely not going to be a positive trend in foreclosures as long as the jobs market remains tough.  The latest data shows that while the pace of layoffs is slowing, the economy is still isn't creating jobs.  In order for that to happen, according to the global chief economist at MF Global, initial "claims will likely have to resume a downward trend if payrolls are to improve."

However, things are moving in that direction.  According to the director of worldwide recruiting for Accenture, there is "a very broad uplift globally" in demand for Accenture's services.  He added that demand is heading "right back to the pre-recession levels."

Still, until we see payrolls expand, it's hard to see how the economy can grow strongly.  And as long as unemployment remains high, foreclosures are going to remain high as well.  The trend may be towards a slower rate of foreclosures, but the trend still is up.

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One of the pillars of conventional wisdom when it comes to sports is that spending more equals more wins.  If that were the case, then the New York Yankees, also known as the Yankee$, would have a lot more than two World Series rings in the past decade.  So obviously, there is more to it than spending a lot of money.  One of the reasons that this doesn't work as well now is that it is usually the older players who command the most money.  They are the ones with the track records and histories to justify the big salaries.  But they often are the ones who have past their primes, and who won't deliver as much as they have due to their skills declining as they age.

But that's baseball.  The NFL has a hard salary cap, and it has a floor.  So, the question is, in a more level playing field, does spending money equal success on the field?

Surprisingly, the answer is no.  The top five spending teams in the NFL and their payrolls are:

• New York Giants, $138.4 million
• Houston Texans, $128.3 million
• Miami Dolphins, $126.9 million
• New Orleans Saints, $121.6 million
• Chicago Bears, $120.7 million

Of these teams, only the Super Bowl winning Saints made the playoffs.

The bottom five teams as far as payrolls go are:

• Kansas City Chiefs, $81.8 million
• Tampa Bay Buccaneers, $84.6 million
• Seattle Seahawks, $89.1 million
• Dallas Cowboys, $90.3 million
• Cincinnati Bengals, $93.8 million

On this list were the division winning Cowboys and Bengals.

So it's clear that in a more level playing field, spending does not equal winning.

That brings us to another question.  Which team gets the most bang for its buck?  In order to determine this, what we did is break down the cost per win among NFL teams.  The leaders here are:

• Indianapolis Colts, $7.4 million per win
• San Diego Chargers, $7.5 million per win
• Dallas Cowboys, $8.2 million per win
• Minnesota Vikings, $8.3 million per win
• New Orleans Saints, $9.4 million per win

Now we're seeing a pattern here.  The teams that spent their money wisely, and who spent the least per win all made the playoffs.

On the other hand, the teams that squandered their money and paid the most per win?  Not a playoff team among them.  They are:

• St. Louis Rams, $99.7 million per win
• Detroit Lions, $50.0 million per win
• Tampa Bay Buccaneers, $28.2 million per win
• Washington Redskins, $25.0 million per win
• Oakland Raiders, $22.3 million per win

The key to winning in the NFL appears to be spending wisely.  This is likely due to the salary cap and floor.  General managers in the NFL have to balance their needs with the cost of filling those needs.  And everyone has a budget.  It's not like MLB, where teams like the Red Sox and Yankees can just outspend teams like the Twins and Devil Rays.

Want a league where everyone has a shot at winning?  Implement a hard cap like the NFL has, and make general managers spend their money wisely.  That will put a premium on intelligent decisions on players, and it will help alleviate competitive imbalances that exist in MLB.

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While larger businesses are starting to show optimism and some of them have resumed hiring, small businesses remain pessimistic.  The National Federation of Independent Business released its small business optimism index for the month of February, and it showed a drop of 1.3 points to 88.0.

Seeking to place blame, the chief economist for the NFIB blamed the "Washington DC agenda" for the negative sentiment among small businesses.  First, someone's got to define what that agenda is.  Second, what is it about, say, restricting large banks from prop trading that will affect small businesses?  If they were affected by the rule, then they wouldn't be a small business, would they?

It is disappointing to see what should be an economic data release tainted by political rants from the organization releasing the data.  Regulation is something that the NFIB rails against even though most regulations exempt its members, and the organization is seizing on this negative survey to push its agenda.  Nevertheless, there is useful information in the report.

While optimism has dipped among small businesses, they look like they plan to resume hiring.  Employment per firm dropped by 0.13 workers, which is way down from the 0.5 workers per firm average since the recession began.  Looking forward, 13 percent of small businesses plan to increase their payrolls, while eight percent plan to cut payrolls.  The number of businesses planning to hire more workers increased by three points, while the number of businesses looking to cut them decreased by two percent.  Thus, even in the negative survey, there's some good news.

Despite the ranting against the "Washington DC agenda" from the NFIB, the real reason for pessimism among small businesses is decreasing sales.  Companies reporting higher sales dropped by two points to 15 percent, while companies reporting lower sales was unchanged at 46 percent.  That is the real reason for pessimism among small businesses.  It is hard to be optimistic when you see sales falling. 

One of of the main pillars of conventional wisdom is that small businesses drive economy.  That thinking needs to be examined thoroughly.  It is clear that larger employers are the ones who are resuming hiring at a far faster rate than small businesses.  Maybe it's the large employers that drive hiring, and small businesses just follow along.

Small businesses and family farms are, in the opinion of this writer, often given a spot on a pedastal that they simply don't deserve.  And this comes from an individual who is the sole proprietor of a small business.  Who, incidentally, will never join the NFIB because they're so full of crap.

This is something to ponder on a day where there's little economic data to drive the markets.

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