Employment situation still treading water

Good morning folks! I hope that this message finds you doing well.

That scion of payroll, ADP, tracks unemployment privately, in addition to efforts by the U.S. government. Today, ADP said that the U.S. economy lost 22,000 private sector jobs in January. This figure was slightly better than economists had been expected. However, it still represents a loss of jobs and not the creation of jobs.

Analysis: Truly there is not much analysis to be done here, but I will say that the U.S. is clearly treading water in terms of job creation. And that is slightly an aggressive statement on my part because the U.S. has yet to add net jobs post-recession over a single four week period. All that can be said is that the job losses are not as steep as before. Another sign that the unemployment picture remains muddied is the fact that the data consistently strongly violate expectations, both better than projected and worse than projected, with no consistency in the data.

Because of this, the U.S. consumer is going to remain timid. That means that the economy will remain timid, too. Any outside shock to the system would, in my opinion, cause the U.S. economy to lilt back into recession.

Importance grade: 5; while the unemployment picture is very important, the fact is that the ADP data do not have the gravity of the Federal Government figures which come out Friday. The ADP data primarily have importance in that they provide a sneak preview into the likely direction of the “Official” figure.

Jason