THE BASIS POINT

Fundamentals 8/3: Long Way From Jobs Recovery

Jobs
ADP private jobs for July +114,000. It is hard to get an accurate estimate for Friday’s BLS jobs report from the ADP report, and BLS is what counts. Last month BLS private jobs was 100,000 less than ADP. Also, it is likely that there will be a continuing loss of public jobs at the state and local levels. ADP shows a large concentration of jobs growth (48,000) in health care and education.

Challenger Job-Cut Report
-This is a report of announced jobs cuts by large companies
-Announced Layoffs (July) were 66,414
-Previous month was 41,432.
-As graph shows, this is a leading indicator of Jobless Claims and a bad story for jobs recovery
Job-Cut Notices

MBA Mortgage Applications
-Purchase Index Week/Week: 5.1%
-Refinance Index Week/Week: 7.8%
-Composite Index Week/Week: 7.1%
-All of these are reversals from last weeks downward changes.
-Refis picked up because rates are down.

Factory Orders (June data)
-Factory Orders Month/Month: -0.8 %
-Previous was +0.8%
-This is continued effect of supply side getting ahead of consumer.
-There is also a story here about how bad data from BEA about GDP gives poor guidance to everyone.
Factory Orders

ISM Non-Manufacturing Index
Composite Index for July was 52.7 down from 53.3. Same story as Factory Orders: slowing growth. This ISM report measures services sectors of the economy. The behind the scenes story of the economy is simple. Government and business have done much to stimulate the economy but the consumer is not on board.