On almost any night of the week, Churchill's Restaurant is hopping. The 10-year-old hot spot in Rockville Centre, Long Island, is packed with locals drinking beer and eating burgers, with some customers spilling over onto the street. "We have lots of regulars—people who are recognized when they come in," says co-owner Kevin Culhane. In fact, regulars make up more than 80 percent of the restaurant's customers. "People feel comfortable and safe here," Culhane says. "This is their place."

Thriving neighborhood restaurants are one small data point in a larger trend I call the new localism. The basic premise: the longer people stay in their homes and communities, the more they identify with those places, and the greater their commitment to helping local businesses and institutions thrive, even in a downturn. Several factors are driving this process, including an aging population, suburbanization, the Internet, and an increased focus on family life. And even as the recession has begun to yield to recovery, our commitment to our local roots is only going to grow more profound. Evident before the recession, the new localism will shape how we live and work in the coming decades, and may even influence the course of our future politics.

Perhaps nothing will be as surprising about 21st-century America as its settledness. For more than a generation Americans have believed that "spatial mobility" would increase, and, as it did, feed an inexorable trend toward rootlessness and anomie. This vision of social disintegration was perhaps best epitomized in Vance Packard's 1972 bestseller A Nation of Strangers, with its vision of America becoming "a society coming apart at the seams." In 2000, Harvard's Robert Putnam made a similar point, albeit less hyperbolically, in Bowling Alone, in which he wrote about the "civic malaise" he saw gripping the country. In Putnam's view, society was being undermined, largely due to suburbanization and what he called "the growth of mobility."

Yet in reality Americans actually are becoming less nomadic. As recently as the 1970s as many as one in five people moved annually; by 2006, long before the current recession took hold, that number was 14 percent, the lowest rate since the census starting following movement in 1940. Since then tougher times have accelerated these trends, in large part because opportunities to sell houses and find new employment have dried up. In 2008, the total number of people changing residences was less than those who did so in 1962, when the country had 120 million fewer people. The stay-at-home trend appears particularly strong among aging boomers, who are largely eschewing Sunbelt retirement condos to stay tethered to their suburban homes—close to family, friends, clubs, churches, and familiar surroundings.

(...)

After decades of frantic mobility and homogenization, we are seeing a return to placeness, along with more choices for individuals, families, and communities. For entrepreneurs like Kevin Culhane and his workers at Churchill's, it's a phenomenon that may also offer a lease on years of new profits. "We're holding our own in these times because we appeal to the people around here," Culhane says. And as places like Long Island become less bedroom community and more round-the-clock locale for work and play, he's likely to have plenty of hungry customers.

Well worth a read and a closer reflection.

Every component of the index slowed, except for Supplier Deliveries and Backlog of Orders. More troubling, though, was the fact that the Employment component worsened to 46.2 from 46.4.

Nonetheless, the survey did signal that the economy is growing. If extrapolated, the September reading equates to GDP growth of 3.6%. However, the pace of recovery remains uneven, as was evident by the responses included in the survey:

"Business is picking up - lots of opportunities." (Primary Metals)

"Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)

The ISM report comes out just as the IMF raised its projection for economic growth. The organization now expects the U.S. to increase output by 1.5% next year, slightly more than double the prediction made in July.

It is also worth noting that brokerage analysts have been raising their profit forecasts on several cyclical companies. During the past 4 weeks, the 2009 Zacks Consensus Estimate has been raised for 3M (MMM), DuPont (DD) and Packaging Corporation of America (PKG).

The upward revision in profit projections is even more widespread for 2010, with forecasts being raised on United Technologies (UTX) and Caterpillar (CAT).

Despite the bullish tone to forecasts, it is important to realize that the U.S. economy continues to rely on government support. New car dealers are suffering a severe Cash for Clunkers hangover. Taxpayers still own Citigroup (C), Bank of America (BAC) and AIG (AIG). Realtors are clamoring for an extension of the first-time homebuyers credit. And the Fed recently lengthened its program for purchasing agency-backed debt.

Therefore, while there is reason for optimism, investors should not let hope turn into euphoria. The recovery won't feel like a recovery to many Americans. It will also be marked by an uneven pace of growth, as the September ISM survey signals.

Every component of the index slowed, except for Supplier Deliveries and Backlog of Orders. More troubling, though, was the fact that the Employment component worsened to 46.2 from 46.4.

Nonetheless, the survey did signal that the economy is growing. If extrapolated, the September reading equates to GDP growth of 3.6%. However, the pace of recovery remains uneven, as was evident by the responses included in the survey:

"Business is picking up - lots of opportunities." (Primary Metals)

"Business remains slow, with no sign of improvement again this month." (Nonmetallic Mineral Products)

The ISM report comes out just as the IMF raised its projection for economic growth. The organization now expects the U.S. to increase output by 1.5% next year, slightly more than double the prediction made in July.

It is also worth noting that brokerage analysts have been raising their profit forecasts on several cyclical companies. During the past 4 weeks, the 2009 Zacks Consensus Estimate has been raised for 3M (MMM), DuPont (DD) and Packaging Corporation of America (PKG).

The upward revision in profit projections is even more widespread for 2010, with forecasts being raised on United Technologies (UTX) and Caterpillar (CAT).

Despite the bullish tone to forecasts, it is important to realize that the U.S. economy continues to rely on government support. New car dealers are suffering a severe Cash for Clunkers hangover. Taxpayers still own Citigroup (C), Bank of America (BAC) and AIG (AIG). Realtors are clamoring for an extension of the first-time homebuyers credit. And the Fed recently lengthened its program for purchasing agency-backed debt.

Therefore, while there is reason for optimism, investors should not let hope turn into euphoria. The recovery won't feel like a recovery to many Americans. It will also be marked by an uneven pace of growth, as the September ISM survey signals.

Company Description

Packaging Corporation of America produces containerboard and corrugated packaging products in the U.S. The company saw sales of $2.4 billion in 2008. PKG runs 4 paper mills and 68 corrugated product plants in 26 states.

Higher Forecasts

The company continues to see upward revisions of the Zacks Consensus Estimates. Analysts are currently calling for full-year earnings of 97 cents per share, which is up from 60 cents over the past 3 months.

Analysts are see 25 cents per share for the third quarter, versus the 3 months-ago level of 13 cents.

The third-quarter report is scheduled for release on Oct 19.

Robust Results

The company posted second-quarter adjusted earnings of 28 cents per share, which was below the previous year's 34 cents but well ahead of the Zacks Consensus Estimate of 16 cents. Sales slipped 11% year-over-year.

Paul T. Stecko, Chairman and CEO of PCA, said, "Business conditions improved significantly during the quarter with higher than expected sales volumes, less market-related mill downtime, and lower operating costs. Compared to the first quarter, our corrugated products shipments were up 10%, or 40,000 tons, and outside sales of containerboard were up 20%, or 16,000 tons. Energy costs were also significantly lower than expected driven by operating efficiencies and lower prices. PCA's containerboard inventory fell during the quarter, and industry inventories were at their lowest June ending level in almost 30 years."

PKG shares spiked on the strong quarter and have been outpacing the market since, trading near a 52-week high.

Solid Income

The company declared a quarterly dividend of 15 cents per share, noting that it will be paid to shareholders of record as of September 15 with a payment date of October 15.

Packaging Corporation offers a dividend yield of 2.9%, beating the industry average of 1.8%.

Stellar Fundamentals

Packaging Corporation offers a return on equity (ROE) on of 17%, exceeding the industry average of 12%. The company's net profit margin of 9% tops the industry average of 4%. Zacks Investment Research