Wall Street Greek: Jobs Data Parade Begins with ADP & Challenger

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It's that time of the month again. I'm talking about the time for the regular monthly jobs data, which kicks off with today's ADP Private Employment Report and Challenger, Gray & Christmas' Job-Cuts Announcement. These two key metrics will be followed by the Monster Employment Index and Weekly Jobless Claims tomorrow, and the federal government's Employment Situation Report on Friday.

Jobs Data

ADP Private Employment Report

ADP today noted the lowest monthly private employment loss since September of last year. Private industry payrolls fell just 298K in the July-August period, down from the revised June-July count of -360K, and offering further hope for the labor market and economy. However, let's not lose sight of the fact that the labor market is still deteriorating, just at a slower rate. While the second derivative, the rate of change, matters much to the leading indicator stock market, what matters most to economic growth, consumer spending and corporate profits (and therefore stocks), is an improving employment situation. We do not have that yet, based on this data...

Looking more closely at the details, goods producing industries and the service sector shed jobs equally last month, but the rate of decline in the manufacturing sector improved. This no doubt was related to the stabilization of the auto sector and general economy.

Challenger's Job-Cut Report

Challenger, Gray & Christmas reports on announced corporate layoffs monthly, offering insight into the hiring trends of corporations. After panic set in, businesses gave in and begin laying off employees indiscriminately; and so we would expect this report to be one of the leading employment data points in showing labor market turn.

That said, rejoice in the fact that announced job cuts decreased by 21.5% from July's count. Challenger noted 76,456 announced layoffs in August, nearly returning completely to the nice number seen in June. Still, the market is already counting on economic recovery, so we need to see turn here in the trend for these data points to really drive trading. The broad market indexes are all about flat this morning, as a result. HOWEVER, I guess that's still better than the bloodshed of the past two days. Oh by the way, did you read our market warning on Monday and take heed? You might have saved some money.