According to the folks at Challenger, Gray & Christmas, announced corporate layoffs last month remained at close to the lowest level registered in the past 11 years. By now it's obvious that Corporate America has all but finished its downsizing. So the next shoe to drop will be a renewed interest in hiring. Signs of this are already evident in the strong rise in temp hires, as noted in yesterday's post. And according to Challenger, announced hiring plans last month were among the largest they have recorded in the past six years (bottom chart). And don't forget that through August we saw 1.8 million new jobs created year to date according to the household survey of employment. This Friday's jobs numbers should shed further light on the subject, and I expect it to be favorable.
The ADP Employment Report does not confirm your optimism.
ReplyDeleteNo, but other things do. In any event, the ADP report is subject to revision, and it has not been tracking the payroll report well (because of census workers). I take all monthly jobs reports with a grain of salt. But in this case it appears to me that the preponderance of evidence points towards improvement.
ReplyDeleteActually, if you aggregate data points, it appears that, in general, businesses are showing increased interest in hiring temporary and part time workers, but they are not very interested in hiring full time employees. Also, if the Fed is going to err on the side of inflation by monetizing the debt, then the upwards price pressure on essential commodities like oil will put pressure on personal incomes and may have the effect of slowing more hires since employers will face the need to retain employees by compensation increases that reduce the pot of available money for new hires.
ReplyDeleteRick: good point. You highlight how the unintended consequences of government tinkering in the economy can foil the most "brilliant" of plans. The simple truth is that you can't create a stronger economy by printing money.
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