Pre-July 4 data rush, part one: Jobs
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PRE-JULY 4 DATA RUSH, PART ONE: JOBS
Just as traffic bottlenecks ahead of a national holiday as folks scramble to escape the city, investors were treated to a traffic jam of economic data on this July 3 Wednesday.
This post tackles this morning's labor market data, all of which is a prelude to Friday's jobs report.
The Labor Department's employment report is always an attention grabber, and this time its one of the last major reports before the Federal Reserve convenes for its July monetary policy meeting, its last of the summer.
To begin with, private U.S. employers increased their headcount by 150,000 last month, marking an unexpected 4.5% monthly decrease and falling short of consensus.
Although payroll processor ADP's National Employment index USADP=ECI is not a reliable predictor of official Labor Department data, the print suggests 10,000 fewer private sector job adds than analysts expect Friday's employment report to show.
Even so, "the deceleration signaled by ADP's data makes sense, given the pick-up in layoffs and recent deterioration of hiring indicators," writes Ian Shepherdson, chief economist at Pantheon Macroeconomics.
The number of U.S. workers who joined the queue for unemployment benefits USJOB=ECI inched 1.7% higher last week to 238,000, a hair above the 235,000 predicted by economists.
The overall trend, as expressed by the four-week moving average of initial claims, is essentially sideways.
The data suggest "a loosening in demand for workers," writes Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "The data bear watching for signals about a more material weakening in the labor market going forward, which will have implications for Fed policy."
Ongoing claims USJOBN=ECI, reported on a one-week lag, surprised to the upside, rising 1.4% to 1.858 million, suggesting it's taking increasingly longer for freshly laid off workers to find a suitable replacement gig.
Speaking of laid-off workers, last month corporate America announced it would shed 48,786 jobs, according to executive outplacement firm Challenger Gray & Christmas (CGC).
That's a 23.6% drop from May, but a 19.8% increase over June 2023.
Year-to-date, CGC's Planned Layoffs USCHAL=ECI report shows that a total of 434,645 job cuts were announced, down 5.1% from January-June 2023.
That said, June's did might be explained away by seasonal factors.
"June is typically a low month for job cut announcements, as most companies are midyear or at the end of their fiscal years," says Andrew Challenger, workplace expert at CGC. "The months following fiscal year ends tend to have a spike in cuts, as those plans are implemented."
So far this year, the hardest hit sectors are tech, government, financial, services and education.
(Stephen Culp)
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KICKING THE CAN DOWN THE ROAD - CLICK HERE
TOUGH TIMES ARE NOT OVER FOR EUROPEAN AUTOS - CITI - CLICK HERE
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A CLOSER LOOK AT U.S. DRUG PRICING RISKS - CLICK HERE
THE GRASS IS GREENER TODAY IN EUROPE - CLICK HERE
SUNNY START IN EUROPE - CLICK HERE
POWELL SPARKS OPTIMISM ON RATE CUTS - CLICK HERE
ADP vs the Labor Department https://reut.rs/45Qje1w
Initial jobless claims and JOLTS firings https://reut.rs/3Lbb1vk
Continuing jobless claims and JOLTS hires https://reut.rs/3xGCZMy
Challenger Gray https://reut.rs/4bwsYPE
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