Use access key #2 to skip to page content.

alstry (35.13)

Job Losses Growing

Recs

8

July 02, 2008 – Comments (9)

ADP Says U.S. Companies Decreased Payrolls by 79,000

By Bob Willis

July 2 (Bloomberg) -- Companies in the U.S. cut an estimated 79,000 jobs in June, a private survey based on payroll data showed.

The ADP report, which doesn't include government jobs, overstated private employment by about 111,000 jobs a month on average for the first five months of the year.

ADP was forecast to show a decline of 20,000.....

A loss of about 80K vs a forecast of 20K....or 4X the forecast.

Many businesses in America are shrinking at an unprecedented rate.  So are government revenues.  In this environment, the job losses will only increase causing even further slowdowns.  It is hard to buy a house or car without a job.

Some of you can't understand my forecasting 30% unemployment.  The number is not intended to be shocking, simply a mathematical estimate based on how the inputs are calculated. 

For example, right now the government is considering extending unemployment benefits.  If this happens, you can expect a number of people currently not counted as unemployed to reapply for benefits and increase the statistical count of unemployed workers.

As spouses and retired people reenter the workforce to search for jobs, that will increase the count of unemployed workers.  The same holds true for those released from their jobs.

Once you add up the job losses, people reentering the work force, and effect from extention of benefits, we could easily see 30% unemployment by the end of the year......in the mean time, you might be shocked by the likely increase in July.

9 Comments – Post Your Own

#1) On July 02, 2008 at 9:17 AM, alstry (35.13) wrote:

UnitedHealth Cuts 2008 Outlook as Premiums Slip- AP

Starbucks to Close 600 US Stores, Rein in Growth- AP

Blockbuster Withdraws Plan to Acquire Circuit City- AP

June Car Sales Plummet; More Declines Expected- AP

 

The above headlines from just this morning signal further contraction ahead.  Now it is spreading into healthcare which is consistent with my channel checks.

Healthcare and construction contributed to over 100% of job growth between 2000 and 2006.

Remember my CAPs buddies....need is not the ultimate driver of sales....neither is demand....but both are necessary and important but not sufficient alone.

The most important driver of sales is ability to pay. There are many people in America who need and demand many things...they simply can't afford to pay.  Right now, as jobs are lost, prices for food and fuel skyrocket, and access to credit limited, ability to pay is getting squeezed everyday.

When many can pay, sales are wonderful even for things we don't need....like $5 coffee drinks or $2000 grills or $100K SUVs.

Be careful about the pent up demand argument.  Prior to marrying my wonderful wife a number of years ago, I had a lot of pent up demand to meet the acquaintance for many women I thought were attractive.....however, despite my demand, my actual success never quite met my desires.

In the end, demand is simply a potential....it is money that is honey that always gets the bees.....a little personality goes a long way as well.

Report this comment
#2) On July 02, 2008 at 9:19 AM, EScroogeJr (< 20) wrote:

Fom your mouse to God's ear! But I still fail to see how it can happen. The fortress looks so unassailable, it could survive ten banking crises of this magnitude. My only hope is for OPEC to cut production, anything short of $250 per barrel will be ineffective...

Report this comment
#3) On July 02, 2008 at 10:07 AM, lquadland10 (< 20) wrote:

Does this take into account all the people who can't file anymore for un employment or just don't qualify like summer collage students?

Report this comment
#4) On July 02, 2008 at 10:35 AM, alstry (35.13) wrote:

Unless the methodology changes, it takes into account the current data as reported.  A number of people who can't file right now will be able to refile once benefits are extended.  My guess is that it will only add a fraction of a percentage to the numbers.

Where the big changes come is the birth/death adjustments, layoffs, and people reentering the workforce.

President Obama will have his hands full.  My guess is that things may be so bad economically, by the time elections come around, card carrying KKK members will be kneeling kissing his feet come election time.

Report this comment
#5) On July 02, 2008 at 11:15 AM, alstry (35.13) wrote:

The parade gets longer and longer and no politicans in sight?  Maybe they all should get fired!!!!!

July 2 (Bloomberg) -- UnitedHealth Group Inc., the largest U.S. health insurer, cut its earnings forecast for the second time this year and said it would trim 4,000 jobs as membership fell and expenses increased.

Report this comment
#6) On July 02, 2008 at 12:15 PM, hansthered0 (< 20) wrote:

What is your occupation alstry?

Report this comment
#7) On July 02, 2008 at 12:33 PM, alstry (35.13) wrote:

I have been an Ice Cream Man.  Sold shoes in a very expensive Italian Shoe Store(by far the best job ever for meeting women).  Owned a Restaurant.  Been the Chief Investment Officer of a Transportation Company.  Been an Attorney-Litigator.  Flipped Burgers in College.  Clerked for a Judge.  Had a lawn cutting service.  Operated a successful Lemonade Stand.  Sold my next door neighbor leaves of his own tree-after I washed them of course.  Sold chewing gum to the kids in grade school.  Babysat kids.  Delivered newspapers.  I am a husband.  A father.  A friend.  And one who has no idea where his country and the world is headed right now.  So I guess my occupation is confused thinker.

Report this comment
#8) On July 02, 2008 at 1:24 PM, alstry (35.13) wrote:

I have never been a flight attendant but I do have a very good friend who is a pilot for one of the majors:

1:21[AMR] American Airlines may furlough 900 flight attendants: report

Report this comment
#9) On July 02, 2008 at 2:16 PM, jesusfreakinco (28.81) wrote:

Al,

I am sure you are surprised that the SPF deal got funded as am I.  I guess the theory of the greater fool still reigns.  

It can't be that much longer until we see one of the big boys file.  Some bankers have brains and I have to believe they'll start to use them soon... 

Nice job on racking up the points.  I just can't seem to pick up as much momo as you.  Keep it up!

Report this comment

Featured Broker Partners


Advertisement