<\/p>\n
The late May and early June financial market sell off had many causes, but among the most important was the sputtering recovery in the U.S. jobs market<\/a>.\u00a0 In fact, the data for about five weeks now has been mixed to down.\u00a0 Until now.<\/span><\/p>\n Separate jobs figures this week indicate a job market that appears to be picking up steam.<\/span><\/p>\n First, Automatic Data Processing (ADP) the massive payroll firm, reported that private sector employers added 157,000 jobs in the month of June.\u00a0 This compares to just 36,000 jobs created in the month of May.<\/span><\/p>\n Second, the U.S. Department of Labor said that initial jobless claims fell this past week by 14,000 to a level of 418,000 new jobless claims filed.\u00a0 Because this data is so volatile, typically the more important number is the four week moving average.\u00a0 This tally shows 3,000 fewer jobless claims being filed and an average level of initial jobless claims of 424,750.<\/span><\/p>\n Analysis:<\/strong> The most important aspect of this story is the high number of private sector jobs added.\u00a0 Why? Because private enterprise has sat on the sidelines with literally trillions of dollars of cash since 2010<\/a> and businesses have not spent their cash or their profits on either new growth projects or new employees<\/a>.<\/span><\/p>\n Businesses have made this choice because the economic recovery has not been strong enough to convince them that making the large investment in new employees is worth it.\u00a0 But the lack of improvement in the employment situation has made consumers skittish.\u00a0 In turn, they have not spent much money, which has made businesses nervous.<\/span><\/p>\n This economic “game of chicken” between employers and consumers<\/a> is something that I have been writing about for the last year.\u00a0 For the vicious circle to be broken one of the two parties needs to show some courage or be given some encouragement.<\/span><\/p>\n Consumers should be forgiven for being nervous.\u00a0 After all, most of the job layoffs were executed by companies that are still in business.\u00a0 So the losses of the Great Recession were borne mostly by employees and investors, not by big business.<\/span><\/p>\n