Making Sense of Job and Employment Reports

Job reports and unemployment/employment figures can be confusing and overwhelming. Don't sweat them.A

A news release published today by one of the country’s largest outplacement firms Challenger, Gray & Christmas  reports layoffs slowed nationwide in  June.

The C,G & C report says “job cuts fell to a 15-month low of 74, 393 jobs ” which was 33 percent less than May, and the “lowest since 53,579 job cuts were announced in March 2008.”

A report, also released today, by payroll-firm ADP (.pdf) says 473,000 payroll cuts were made for the month of June. The ADP numbers were worse than analysts expected.

What’s the deal? How do you make heads or tails of these different reports? Look for a larger macro view of the employment picture through economists and analysts, then compare them to the government data – figures from the Bureau of Labor Statistics (BLS), which will release June employment data Friday.

Here’s a take on the ADP numbers and more, from a Bloomberg news article:

“This is a weak number,” Joel Prakken, chairman of Macroeconomic Advisers LLC, said on a conference call with reporters. “It’s a pretty clear indication that, while we’re not shedding jobs as rapidly as the first part of the year, the labor market is still in a state of decline.”

Economists forecast the ADP report would show a decline of 395,000 jobs, according to the median of 29 estimates in a Bloomberg News survey. Projections ranged from decreases of 280,000 to 532,000.

A Labor Department report tomorrow may show employers cut 363,000 workers from payrolls in June and unemployment rose to a 26-year high of 9.6 percent. The increase from May’s 9.4 percent jobless rate would be the smallest since November 2008. …

The ADP report ran counter to other figures today that showed job cut announcements in June fell 9 percent to 74,393, the fewest in more than a year, from 81,755 in June 2008, according to Chicago-based placement firm Challenger, Gray & Christmas Inc.. It was the first year-over-year decrease since February 2008.

So while the C,G, & C report has very different numbers than ADP, one thing is certain: No one is ready to declare that hiring and jobs are trending toward a recovery. Job losses may be slowing right now, but many economists expect that the unemployment rate is going to get higher before it gets smaller.  The C,G, & E report makes sure to point out that “the 896,675 layoffs announced during the first six months of 2009 is the largest January-June total since Challenger job-cut tracking began in 1989.”

CEO John Challenger gives his take within some industry context:

“The government and non-profit sector will continue to be a source of heavy job cutting for the remainder of the year.  States and local municipalities are running significant budget deficits and have no option but to keep making cutbacks in services and personnel.  Even after an injection of federal stimulus money, many states will still be in the red,” said Challenger.

“Meanwhile, job cuts in financial services, industrial-goods manufacturing, computer and consumer products have slowed considerably and may continue to do so with the economy stabilized.  It could be several more months before we see hiring make a comeback, but it appears that many employers have reached the staffing levels they need to make it through the recession,” he added.

Is all this information too much to take? It can be overwhelming, especially if you’ve lost your job and are in need of some guidance.

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