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Stock Strategist Industry Reports

No 'Easy' Button for Office Products Distributors

But industry leader Staples might have an advantage.

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With initial unemployment claims still above 400,000--the threshold where economists believe more "net" jobs are being added than lost--unemployment is expected to remain above 8% for the remainder for the year, proving the economic recovery in 2011 is not as robust as expected.

Likewise, office products distributors have been pinched amid the lackluster economic environment (consistent with prior cycles) because of their inherent ties to unemployment. High unemployment levels negatively affect overall office product distributor revenue, as these companies are exposed to nearly all customer categories (individual consumer, small business, and large business). Corporations are hoarding cash or returning it to shareholders in the form of increased dividends and/or share repurchases.

Joscelyn MacKay does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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