Voters flocked to the polls yesterday in a couple of key regional races that attracted the attention of a national audience, and may have set the tone for the 2010 mid-term elections. The voters, regardless of their political affiliation, did share a common thread as each of them entered the voting booth: Jobs and the economy were front and center.
Irony has a twisted way of appearing at the most opportune times. Knowing the elections occurred in the same exact week that also showcased voters’ chief concern about millions of eliminated jobs, two private reports were released this morning providing evidence that the job market, while still very ill, is showing signs of stability.
First released was the report from placement firm Challenger Gray & Christmas. This report, which provides data about planned job cuts announced by U.S. companies, declined for the third consecutive month, falling 16% in October to 55,679. Challenger says this figure is the lowest since March of 2008.
“While there are still some trouble spots, the continued decline in job cutting activity across most industries is a positive sign that the economy is slowly improving,” said CEO John Challenger. “However, it is important to realize that, as deep and widespread as this recession was, it is going to be a long and sometimes painful recovery.”
Soon after the release of the Challenger report, payroll firm ADP published a report about U.S. companies having cut an estimated 203,000 jobs in October. The data provided by ADP Employer Services was the smallest in more than a year and followed a revised 227,000 decline from the prior month.
Not every Wall Street economist is of the mindset that the U.S. economy is about to turn the corner in regards to job growth. From Bloomberg News:
The [ADP Report] signals unemployment will keep climbing even after the economy begins to expand, one reason why Federal Reserve policy makers may pledge to keep interest rates low for a long time after their meeting today. ADP has overstated the Labor Department’s initial estimate of payroll losses by 103,000 per month on average in the five months to September.
“The losses, while smaller than in previous months, were nonetheless widespread,” Joel Prakken, chairman of Macroeconomic Advisers, LLC, said on a conference call with reporters. “I’m still expecting to see payroll employment decline probably through the end of the year, not turn up until January or February.”
Both reports come two days before the Labor Department releases its nonfarm payroll report and the current unemployment rate. Wall Street analysts are expecting the unemployment rate to jump by 0.1% to 9.9% in October, which will be the highest since 1983. Consensus is also expecting employers to have cut 175,000 jobs in the month.
Regardless of the actual figure on Friday, one thing is for certain and that is job losses continue to occur. Moving forward, what will relieve the tension amongst yesterday’s voters and all other Americans is some sense that the U.S. economy will begin to generate jobs.
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