Deluge of jobs data begins today -- and so far, it isn't good
Thanks to the Fourth of July holiday, a lot of news is going to hit in the next two days. The job market data will be front and center, with a trio of reports on U.S. employment conditions coming out.
The first is the report on layoff announcements from outplacement firm Challenger, Gray & Christmas. It was released earlier this morning, and it showed there were 81,755 job cuts announced in June. That was down almost 22,000 from May but up sharply from a year earlier (+46.7%). The biggest increases in cuts were seen in the telecommunication industry (+9,549), government and non-profit (+6,351), aerospace/defense (+5,786), and financial (+3,021). There were also fairly noticeable increases in the consumer goods and retail sectors.
We also just god the ADP national employment report (PDF link). It tries to give you an early heads up about what the "official" Labor Department figures will show later in the week (though its predictive track record is somewhat spotty). That caveat out of the way, the numbers weren't good. ADP said the economy lost 79,000 jobs in June. That's a large negative swing from the downwardly revised +25,000 reading in May ... much worse than the average forecast for a reading of -20,000 ... and the worst reading since November 2002 (-157,000).
Meanwhile, the New York Times weighs in on the employment picture in a story entitled: "Deepening Cycle of Job Loss Seen Lasting Into ’09." Here's an excerpt ...
"As automakers dropped their latest batch of awful sales numbers on the market on Tuesday, reinforcing the gloom spreading across the economy, the troubles confronting American workers seemed to intensify.
"Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers. Tighter lending standards imposed by banks in the wake of huge mortgage losses have made it hard for many Americans to secure credit — the lifeblood of expansion in recent years — crimping the appetite of consumers, whose spending amounts to 70 percent of the economy.
"Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.
"Now, add to that unsavory mix the word from automakers that sales plunged in June — by 28 percent for Ford, 21 percent for Toyota and 18 percent for General Motors — a sharp sign that consumers are pulling back, making manufacturers more likely to cut production and impose more layoffs. Until recently, the weak labor market has been marked more by the reluctance of employers to create new jobs than by mass layoffs.
"Among economists, the sense is broadening that the troubles dogging the economy will be stubborn, leaving in place an uncomfortable combination of tight credit and scant job opportunities perhaps well into next year.
“It’s a slow-motion recession,” said Ethan Harris, chief United States economist for Lehman Brothers. “In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we’re not getting the classic two or three negative quarters. Instead, we’re expecting two years of sub-par growth. Growth that’s not enough to generate jobs. It’s kind of a chronic rather than an acute pain.”
Early market reaction? The euro is threatening to make an upside breakout against the dollar, though the big determinant there will be what the European Central Bank does and says about rates tomorrow. Bond futures have reversed from a small loss to a small gain, and stock futures have lost a little steam (though they're still up on the morning).
The first is the report on layoff announcements from outplacement firm Challenger, Gray & Christmas. It was released earlier this morning, and it showed there were 81,755 job cuts announced in June. That was down almost 22,000 from May but up sharply from a year earlier (+46.7%). The biggest increases in cuts were seen in the telecommunication industry (+9,549), government and non-profit (+6,351), aerospace/defense (+5,786), and financial (+3,021). There were also fairly noticeable increases in the consumer goods and retail sectors.
We also just god the ADP national employment report (PDF link). It tries to give you an early heads up about what the "official" Labor Department figures will show later in the week (though its predictive track record is somewhat spotty). That caveat out of the way, the numbers weren't good. ADP said the economy lost 79,000 jobs in June. That's a large negative swing from the downwardly revised +25,000 reading in May ... much worse than the average forecast for a reading of -20,000 ... and the worst reading since November 2002 (-157,000).
Meanwhile, the New York Times weighs in on the employment picture in a story entitled: "Deepening Cycle of Job Loss Seen Lasting Into ’09." Here's an excerpt ...
"As automakers dropped their latest batch of awful sales numbers on the market on Tuesday, reinforcing the gloom spreading across the economy, the troubles confronting American workers seemed to intensify.
"Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers. Tighter lending standards imposed by banks in the wake of huge mortgage losses have made it hard for many Americans to secure credit — the lifeblood of expansion in recent years — crimping the appetite of consumers, whose spending amounts to 70 percent of the economy.
"Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.
"Now, add to that unsavory mix the word from automakers that sales plunged in June — by 28 percent for Ford, 21 percent for Toyota and 18 percent for General Motors — a sharp sign that consumers are pulling back, making manufacturers more likely to cut production and impose more layoffs. Until recently, the weak labor market has been marked more by the reluctance of employers to create new jobs than by mass layoffs.
"Among economists, the sense is broadening that the troubles dogging the economy will be stubborn, leaving in place an uncomfortable combination of tight credit and scant job opportunities perhaps well into next year.
“It’s a slow-motion recession,” said Ethan Harris, chief United States economist for Lehman Brothers. “In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we’re not getting the classic two or three negative quarters. Instead, we’re expecting two years of sub-par growth. Growth that’s not enough to generate jobs. It’s kind of a chronic rather than an acute pain.”
Early market reaction? The euro is threatening to make an upside breakout against the dollar, though the big determinant there will be what the European Central Bank does and says about rates tomorrow. Bond futures have reversed from a small loss to a small gain, and stock futures have lost a little steam (though they're still up on the morning).
posted by Mike Larson at
7:57 AM
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