Unemployment numbers released late last week by the U.S. Department of Labor painted a somewhat improved picture on the labor market, as the national unemployment rate fell to 9.5 percent in June from 9.7 percent in May. 

However, several Milwaukee and Midwestern economists do not believe there will be any more improvement in the jobs market for the rest of the year, even if economic conditions improve.

“Now what you’re seeing is there were so many people without a job and they were so discouraged that they were not looking for a job,” said Abdur Chowdhury, an economics professor at Marquette University. “Now that things are improving slightly and the economy is getting slightly better, many of these people will come back to the labor market and will start looking for jobs. That will keep the unemployment rate high.”

The Department of Labor report says virtually the same thing – that 652,000 people gave up on their job searches. Those people were not counted in the report.

Bruce Bittles, chief investment strategist with Milwaukee-based Robert W. Baird, agreed, and said that the unemployment percentage is likely to creep closer to 10 percent by the end of the year.

“I really think this is going to be a jobless recovery, if it is a recovery at all,” he said. “So many folks dropped out of the market that as soon as things pick up, they’ll get right back into it. It’s going to be difficult to get that unemployment rate down.”

Partly because unemployment is going to stay high, Bittles does not expect the housing market to improve for the rest of the year.

“During the second half of the year, home prices could come under pressure again simply because the government’s support program has expired,” he said. “Delinquency is still running at a very high rate, and foreclosure is as well. A lot of inventory is going to continue to come onto the market and I think that will continue to pressure prices in the second half of the year.”

Chowdhury agreed.

“What was propping up the housing market was the government stimulus,” he said. “The question was ‘Can the housing market recover on its own?’ The first month was not so good. That’s something we have to be careful about.”

Although the massive oil spill that continues in the Gulf of Mexico is an environmental disaster, it is not likely to have a significant economic impact on the U.S., several economists say.

“If you look at the oil price since the start of the spill, it has not changed significantly,” said Abdur Chowdhury, an economics professor at Marquette University. “There is still a significant amount of oil inventory and that’s why you don’t see this translating into a higher price.”

Response to the oil spill, both from the government and private sector, could actually be a short-term economic stimulus, said Michael Knetter, dean of the School of Business at the University of Wisconsin.

“It may be something at the margin that requires more government spending and activity in that sense,” he said. “Certain natural disasters make GDP numbers look good. It’s an unmitigated disaster for the country, but I don’t know if that makes the near term economy worse.”

Several economists believe that the oil spill could result in long-term policy changes which could lead to economic drawbacks.

“The largest threat is if, as a result of us not producing more oil, prices begin to rise,” Bittles said. “If oil climbs back to $100 a barrel, I think it’s going to act like a big harsh tax on consumers. It would come at a time when the economy is already in a fragile state, and I think it would be a large negative.”

Roughly three-quarters of the crude oil consumed by the US is imported, said Keith Hembre, chief economist for US Bank, which could mitigate any federal moratorium on oil exploration or drilling.

“Oil production is not a major GDP component,” he said. “Closing down one component of domestic production is probably not a major factor in terms of the global supply situation. But at the margin, it’s less production.”

For more analysis from Milwaukee and Midwestern economists, be sure to read the July 9 issue of BizTimes Milwaukee, which contains our annual Mid Year Economic Forecast.

The board of the newly merged Catholic Knights and Catholic Family Life Insurance has selected Catholic Financial Life as the new name of its Milwaukee-based fraternal benefits organization.

Catholic Knights of Milwaukee completed its merger with Catholic Family of Shorewood last April. Early in the merger proceedings, both organizations identified the importance of considering a new name, said Bill O’Toole, president and chief executive officer of the organization.

“A new organization deserves a new name, but the essence of Catholic Financial Life remains consistent with our combined heritage and will be the foundation for future growth,” he said.

Catholic Financial Life will announce a new portfolio of insurance and financial products and enhanced member benefits this fall. The merged entity is the second-largest Catholic fraternal organization in the country based on assets.

With membership of 126,000 and licensed operations in 28 states, Catholic Financial Life has total assets of more than $1.1 billion and approximately $4.8 billion of insurance in force.

The recently merged organization has selected the independent auditing firm Milliman Inc. to conduct an annual assessment of the organization’s business and operating priorities. Catholic Knights formerly used A.M. Best for its audits.

“This is one more strategic step in our merger process,” O’Toole said. “While we appreciate A.M. Best and the services it has provided, we believe this new partnership is a better fit for our newly merged organization as we look toward the future.  Our focus is on improvement. A.M. Best provides a historical perspective of past performance, while our new partner can provide future direction.”

M&I extends mortgage foreclosure moratorium again

Milwaukee-based Marshall & Ilsley Corp. has extended its foreclosure moratorium an additional three months through Sept. 30.

The initial moratorium was announced on Dec. 18, 2008, as part of M&I's Homeowner Assistance Program. The moratorium is on all owner-occupied residential loans for customers who agree to work in good faith to reach a successful repayment agreement. The moratorium applies to applicable loans in all M&I markets.

M&I's Homeowner Assistance Program also features streamlined assistance programs for potentially distressed homeowners who are identified in advance and proactively offered assistance. It also offers a foreclosure abatement program that features several refinancing options, including term extensions and reduced rates that can be used, as necessary and applicable, to reduce monthly payments.

In addition, M&I continues to extend new credit to new and existing customers. Since the infusion of capital from the U.S. Treasury in mid-November 2008 through April 30, 2010, M&I has extended more than $7.4 billion of new credit.

Anchor Bank’s corporate parent reports smaller loss for 4Q, fiscal year

Madison-based Anchor BanCorp, the corporate parent of AnchorBank, posted a net loss of $26.6 million for the fourth quarter and $177.1 million for the year ending March 31. The bank had a net loss of $45.9 million in the fourth quarter of 2009 and $230.8 million for the 12 months that ended on March 31, 2009.

“We have made significant progress in enhancing our risk management and lending process, as well as aggressively addressing our existing classified loan loss portfolio,” said Chris Bauer, president and CEO. “While we still have a lot of work to do, the results of these efforts can be seen in the improvement in our needs to provide for anticipated loan losses and the corresponding decline in our overall net loss for both the quarter and the fiscal year.”

AnchorBank recently completed the sale of 11 of its branches in northwestern Wisconsin. It is also planning to sell four additional branches in the Green Bay area.

ABC Supply acquires New Jersey company

Beloit-based ABC Supply Co. Inc. has finalized its purchase of Bradco Supply Corp. of  Avenel, N.J.

The acquisition is the largest in ABC Supply's history and adds 129 locations in 30 states to the ABC Supply roster.

With these additions, ABC Supply now has 479 locations in 44 states and the District of Columbia, and sales of more than $4 billion.

ABC Supply is the largest wholesale distributor of roofing in the United States and one of the nation's largest distributors of siding, windows and other select exterior building products.

"We are excited to begin this new chapter in our history," said Diane Hendricks, ABC Supply's owner, co-founder and chairman of the board. "ABC Supply and Bradco share a commitment to serving professional contractors. That focus makes our combined organizations a great fit, and we're confident that, together, our two companies will create enhanced opportunities for our associates and bring new benefits to our customers."

"We are working hard to ensure a smooth transition for our associates and customers alike," said David Luck, ABC Supply's president and chief executive officer. "We are looking forward to sharing ABC Supply's residential strength with Bradco and having Bradco share their commercial strength with ABC Supply. We believe that the combined company gives us a more balanced product and service offering for our customers."

Jackson pharmaceutical and medical product company acquires assets of California firm

Lake Consumer Products Inc., a subsidiary of Jackson-based Wisconsin Pharmacal Company LLC, recently purchased the assets of Consumer Choice Systems Inc. of Napa, Calif.

Terms of the acquisition were not disclosed.

The acquisition adds two urinary tract infection (UTI) products to Lake Consumer Product’s female health offering – a UTI home screening test as well as maximum strength UTI relief tablets. The company will also take over all private label agreements Consumer Choice Systems currently has in place with major retailers.

“These items are a perfect fit and really help advance our commitment to offering women everywhere a well-rounded array of female health solutions,” said Mike Kermendy, vice president of marketing for Lake Consumer Products.

Both the UTI Home Screening Test Stick and the UTI Relief Maximum Strength Tablets will continue to be available under the existing Woman’s Wellbeing brand in the immediate future.

Neenah Foundry’s parent company to emerge from bankruptcy

Neenah Enterprises, Inc., the parent company of Neenah Foundry Co., announced it has secured financing commitments for its exit from bankruptcy.

The confirmation hearing for the company's plan of reorganization has been scheduled for July 6, and the firm expects to close on the financing and emerge from bankruptcy approximately two weeks later.

Upon emergence, the company will have successfully reduced its debt by more than $270 million.

In connection with its exit from bankruptcy, the company will transition to a new executive management team.

Richard Caruso, a managing director for Huron Consulting Services LLC will serve as acting chief executive officer of the company, and Brent Johnson of Huron will serve as acting chief financial officer.

Caruso has served as chief restructuring advisor to the company since it filed for bankruptcy in February and has more than 25 years of experience in the metals, manufacturing and construction industries.

Korn Ferry International, an executive recruiting firm, has been retained to assist the company in hiring permanent successors to Caruso and Johnson, who will replace Robert E. Ostendorf Jr., the current president and CEO, and Dale Parker, the current CFO, respectively.

Ostendorf and Parker will resign from the company.

Fiserv launches customer data software for banks

Fiserv Inc. has launched BancStudy Consumer Deposits, a new solution that will help banks segment and analyze their current customer base to develop effective strategies to drive deposit growth.

BancStudy Consumer Deposits enables financial institutions to gain an in-depth perspective on their customers by analyzing demographic characteristics, lifestyle behaviors and buying patterns.

"We developed BancStudy Consumer Deposits as a direct response to clients who were seeking a rapid and comprehensive way to understand their customers, a critical first step toward developing an effective consumer deposit strategy," said Steve Cotton, president of Bank Intelligence Solutions, Fiserv. "Like our other solutions, BancStudy: Consumer Deposits is engineered to guide more efficient allocation of our clients' finite resources in order to grow their bottom-lines. It's not about working harder, rather it's working smarter."

"Organic growth is critical in today's competitive banking environment, and with the information provided by BancStudy Consumer Deposits, we can pinpoint where there is existing opportunity in our current wallet share to expand deposits and our customer relationships," said Phyllis Pickel, executive vice president of corporate and relationship development at Sunflower Bank.

Pyramax Bank will present its “Four-Ball Golf Challenge - Benefiting the Cystic Fibrosis Foundation” on Monday, July 19 from 7 a.m. to 7 p.m. at Hidden Glen at Bentdale Farms, 3300 Hidden Glen Lane, Cedarburg. The event includes 27 holes of golf, breakfast, lunch, cocktails, raffles and more. Call (262) 798-2060, or email lbudzinski@cff.org.

Banking

• Wisconsin Department of Financial Institutions 
• Federal Deposit Insurance Corp.
• Wisconsin Bankers Association 
• Community Bankers of Wisconsin
• Wisconsin Mortgage Bankers Association
• American Bankers Association
• Bankers Association for Finance and Trade
• Commercial Finance Association 
• Risk Management Association

Mergers & Acquisitions

• Association for Corporate Growth 
• International Business Brokers Association 
• Mergers.com

Wealth Management/Financial/Retirement Planning

• Financial Planning Association
• Financial Planning Association of Southern Wisconsin
• Investment Management Consultants Association
• National Association of Personal Financial Advisors (NAPFA)

Other 

• Society of Financial Service Providers
• Small Business Administration
• State public awareness campaign
• Wisconsin Credit Union League
• CFA Institute
• CFA Society of Milwaukee
• Wisconsin Angel Network