Challenger

This morning the ADP and Challenger releases on employment showed job weakness - especially the ADP index.  Challenger came in at 46.7% increase in announced job layoffs from a year ago.  This was a touch higher from last months 45.6% and the ADP came in at minus 79,000 jobs.  The ADP statistic has been consistently understating the amount of job cuts on a monthly basis.  This month they seem to have gotten in line with the estimate ast the expectation is for a decline of 60,000 jobs tomorrow.  Risk for job cuts are on the downside as the margins from higher inflation are being squeezed forcing companies to start becoming more efficient.  One way is to layoff the marginal workers. 

The Challenger job cuts rose 9.4% from a year earlier.   This is up from -14.2% last month.  This statistic is quite volatile and should not have a major impact.

This is less job cuts and therefore an indication of a continued strong employment situation.  The Financial, Retail and Automotive industries are where most job cuts are occurring.  Healhtcare, Energy and Technology are the industries where there are strong job gains.

74,140 cuts announced versus 63,114 prior. 

The ADP employment number is released at 8;15 ET.  Expectations are for 50,000 jobs versus 106,000 estimate last month.