ADP report shows 371,000 jobs lost
US private employers shed 371,000 jobs according to figures released by ADP today. Expectations had been for a loss of 350,000. As this report was released two days before the employment situation summary that gives us the unemployment rate and the government’s official estimates for non-farm payrolls, it is a good proxy for what to expect on Friday.
On the whole, economic data has been surprising to the upside, making third quarter GDP risks mostly upside risks. The major exception here is consumer data: employment, personal income, and retail sales. Here the data has been weak.
Obviously, as I have indicated in previous posts, a new normal baseline level of output cannot be achieved until the employment picture and personal income stabilize. The ADP report indicates we are far from that point. GDP can only show an increase in the interim due to inventory changes, government spending, or decreased savings and increased consumer debt.
ADP may show 371,000 losses but another metric that tracks US income tax filings by Trim Tabs shows it at a loss of 488,000. The birth-death adjustments used by ADP make the data more of a rigged crap shoot rather than a snap-shot of real unemployment.
In another Wednesday job report, TrimTabs Investment Research estimated that job losses accelerated last month, with 488,000 workers laid off in July, worse than the ADP estimate. TrimTabs uses daily income-tax withholdings to the U.S. Treasury to estimate changes in employment.
“While Wall Street is convinced the recession is over, the economy continues to shed jobs at an alarming rate,” said Charles Biderman, chief executive of TrimTabs.
https://online.wsj.com/article/SB124946923418307415.html