Even Unemployment Is Less Worseby Tim Manni
It has been evident in several reports released over the last month or so — even in the tone of Federal Reserve Chief Ben Bernanke’s voice as he addressed Congress yesterday — that while economic conditions haven’t truly begun to (technically) improve, they’re getting ‘less worse.’
Today we’ll take a quick look into the ADP’s Employment Report as a precursor to the government’s report due out Friday. While the ADP’s report only covers private-sector jobs (doesn’t include government jobs), it gives market analysts a chance to prep for Friday. Despite 491,000 American workers eliminated from payrolls in April, the decline has been the smallest in six months. Economists surveyed by MarketWatch.com predict that 580,000 payrolls will be eliminated in Friday’s report, also making it the smallest decline in six months.
Stabilization in consumer spending following the worst slump in three decades is stoking expectations that the recession will end in the second half of the year. Still, a Labor Department report in two days may show employers cut payrolls in April for a 16th consecutive month, pushing job losses in the current downturn to almost 6 million, according to a Bloomberg survey.
“There is a sense here of a turn,” Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, said on a conference call. Still, “one month’s number does not a trend make. I’m still expecting to see several more months of notable decline in employment. There will be some bumps in the road on the way.”
At this point no one is denying that job cuts are going to persist for months. Yet, if the declines continue to shrink, especially in Labor Department’s report on Friday, a new wave of confidence will begin to flood over the stock markets and consumers as well.
How would you rank your confidence in the economy?