The Bureau of Labor Statistics will release July’s official employment report on Friday, but already there are signs it could be the best bad news in a while.
Now follow along closely here, because this is one of those glass half-full stories where the fact that one report says 371,000 Americans lost their jobs in July and another reports a 31 percent jump in announced future job cuts is actually good news.
How’s that, you wonder?
In both instances the reports were better than they have been in months.
The job loss estimate is from ADP, the payroll company, which bases its count on the paychecks it handles for the non-farm private sector (that’s an important qualifier, since it doesn’t include government jobs). Compare the number of paychecks you cut from one month to the next, apply some statistical adjustments, and you get a number for the entire U.S. private, non-farm, workforce.
The ADP number, released today, is the lowest job loss since October, making it good news even though it was higher than the 350,000 economists expect according to a Bloomberg survey. But the stock market reacted sourly, closing down after four days of up closes, suggesting investors weren’t entirely sold on the bad-news-as-good-news concept.
That’s too bad, since the ADP estimate and the BLS numbers are rarely even close. Since January, ADP’s numbers have been higher than the official figure four times. There’s a good comparison chart on the Dallas News website showing the BLS private labor data compared to the ADP estimates.
A Dow Jones Newswires survey of economists pegs the government’s job loss at 275,000, while the unemployment rate will rise from 9.5 percent to 9.7 percent.
Now to the future jobs loss prediction from Challenger, Gray and Christmas. While it’s a little cheeky to ever call it good news when companies announce 97,373 job cuts, the number is lower than it was in July 2008 when 103,312 jobs were to be lost. It is also the second month in a row that the number was lower than for the same month the year before.
The bad news part of that is the number jumped by that 31 percent we mentioned at the beginning of the story. It was the first increase in announced job cuts since January. (This is how bad news can be good news and bad news at the same time, which is where we could have left the matter, except for this observation directly from CEO John Challenger:
“While there are signs that the economy is stabilizing and the pace of layoffs slowing, we are still a long way from a full recovery. In fact, monthly job cuts are likely to return to levels in excess of 100,000 by the fourth quarter.”
As it happens, we were talking this morning with Jason Ferrara, VP of corporate marketing at CareerBuilder, about the employment outlook. He was about as cautious as a Federal Reserve chairman commenting on interest rates, but he did allow that companies seem to be planning for a hiring pickup.
CareerBuilder’s clients and others the company has talked to recently, are “looking toward stability in the job-loss numbers,” Ferrara told us. Meanwhile, they’re beginning to discuss building and enhancing their employment brands.
It’s certainly not a harbinger of an impending recovery, but Ferrara did mention it in the context of a question about what CareerBuilder is hearing these days. So it is at least a positive sign, not to mention a smart move since branding requires a sustained and integrated (what we used to call multimedia) effort.
Last week, both CareerBuilder and Monster reported declines in their North American revenue. Job postings and resume searching make up the bulk of that income, so with the economy in the tank and job creation in the negatives, it’s no surprise that job boards are down.
The Conference Board reported earlier this week that the number of jobs advertised online in July was all but unchanged from June. According to the report, prepared by Wanted Technologies, there were 3,295,500 jobs online during the month; 700 more than in June. The Conference Board noted that the number has been virtually unchanged since February. That would be the good news part.
The bad news part is that for every job opening online, there were more than four unemployed workers.
Friday’s BLS data release is scheduled for 8:30 a.m. EDT.