Job losses still mounting
The ADP jobs report shows that the private sector shed another 371K in July, slightly higher than expected. Reuters story here. This should cool the heels of the bulls who were hoping for a stronger-than-expected number that would have further fueled sentiment that things are looking up for the U.S. economy.
The government will release its closely watched report that includes public sector jobs as well on Friday. The market is looking for a similar reading of a 325 to 375 decline.
The continued bleeding of jobs continues to be one of the biggest headwinds for the struggling economy since it threatens to spark a negative feedback loop just as other problem areas stabilize. With savings rates extremely low heading into the current recession and debt loads high, many are woefully underprepared to weather unemployment. Already delinquencies among homeowners with good credit are falling behind on their mortgages. The FT reports that delinquencies among prime borrowers is on the rise.
Though the decline in July is the smallest since October, it’s hardly anything to cheer about.