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This morning the Labor Department issued its report on employment conditions for September. The consensus estimate among analysts was -170,000 but the data came in at -263,000. This was worse than last month’s 216,000 job losses and even worse than most pessimistic estimates.
Here’s a long term chart of the nonfarm payroll data going back to the 1960’s:
TrimTabs had the lowest estimate at -358,000. They based this on the continuing decline in income and employment taxes withheld from paychecks. As well the TrimTabs Online Job Postings Index continues to be flat.
The weakness in the economy is reflected in the real-time Aruoba-Diebold-Scotti business conditions index which we looked at yesterday. The most recent data shows an adjustment downwards, taking the ADS index to -0.927 (from around -0.20).
The trend is once again down, which implies a contracting economy. This wouldn’t be a big deal had the ADS first spiked above zero as it has many times before recovering from a negative economic shock. But we didn’t see that this time as the ADS was barely able to return to zero before falling back into the negative.
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