US EMPLOYMENT FOR OCTOBER: A PREVIEW

Three sources of info for next Friday’s US employment report:

First from ADP via Haver Analytics:

In their latest National Employment Report, the payroll processor, Automatic Data Processing (ADP), indicated that the level of private nonfarm payrolls rose 43,000 m/m during October. The September report was revised to show a lesser 2,000 worker decline, revised up from -39,000 reported initially. The latest gain slightly exceeded Consensus expectations for a 20,000 increase.

This is positive although ADP takes no account of government employment. In September, government employment declined 159k, more than offsetting the 64k gains in private payroll. Apart from census employees, government employment will continue to decline (see THIRD WORLD AMERICA: FROM THE JETSONS TO THE FLINTSTONES)

Second, Gallup’s Job Creation Index improved slightly in October:

Gallup’s Job Creation Index increased to +10 in October from +9 in September, indicating a slight improvement in employee hiring and firing perceptions last month. The +10 index score for October reflects 30% of U.S. workers saying their employers are hiring and 20% saying theirs are letting workers go.

Job Creation Index Nationwide, Monthly Averages, January 2008-October 2010

The flip side is that Gallup’s October 18 poll suggested that the US unemployment rate rose in October:

Unemployment, as measured by Gallup without seasonal adjustment, is at 10.0% in mid-October — essentially the same as the 10.1% at the end of September but up sharply from 9.4% in mid-September and 9.3% at the end of August. This mid-month measurement confirms the late September surge in joblessness that should be reflected in the government’s Nov. 5 unemployment report.

Gallup's U.S. Unemployment Rate, 30-Day Averages, January-October 15, 2010

Finally, the October Challenger Job-Cut Report was flattish  for October but offered hope for future months. Via Haver Analytics":

The outplacement firm of Challenger, Grey & Christmas indicated that the level of layoffs during October increased slightly to 37,986 but that remained near the smallest number since June of 2000. The level remains down by more than one-half from last year.

Layoffs rose in October in the chemical, computer, aerospace & defense, automotive, construction, consumer goods, entertainment/leisure, health care, insurance, retail and services industries. Layoffs fell in pharmaceutical, government, industrial goods, electronics, energy, financial, food, industrial goods and media. During the last ten years there has been a 67% (inverse) correlation between the three-month moving average of announced job cuts and the three-month change in payroll employment. Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

Challenger also samples firms’ hiring plans and they jumped last month by 124,766. Plans rose strongly in the energy, financial and services industries but fell sharply in retail.

 

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