If Barack Obama and Congressional Democrats hoped to get some good news in the last employment report before the midterm elections, they may find themselves sorely disappointed — and voters even angrier. Private payroll manager ADP reports today that their analysis shows the private sector lost 39,000 jobs in what is usually considered an important indicator prior to the government release, which comes on Friday. And Reuters got to use its favorite adverb, too:
Private employers unexpectedly cut 39,000 jobs in September after an upwardly revised gain of 10,000 in August, a report by a payrolls processor showed on Wednesday.
The August figure was originally reported as a loss of 10,000.
The median of estimates from 38 economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for a rise of 24,000 private-sector jobs in September.
The Department of Labor numbers from August showed a net increase of 77K jobs in the private sector, which shows that ADP is an important preview, but not necessarily determinative. It doesn’t have the same reach that the government does in sample size, which makes ADP more of a directional signpost.
Still, this shows that hiring has become weaker, not stronger, in the month after “Recovery Summer.” The supposedly stimulating force behind Porkulus has now all but ended, and was supposed to propel the economy into strong job creation. Instead, we have a stunted recovery, due mainly to the massive uncertainties introduced by Democrats on ObamaCare and their refusal to address tax policies and the budget. While capital certainly exists for investment, those holding it are sheltering capital until they have a picture of future costs.
An uptick in the jobless rate seems likely, although probably still small — perhaps a jump to 9.7%, which is more or less the consensus prediction, or a bit higher. That spells even more problems for Democrats in the midterms, and the only major economic announcement left between now and the election will be the initial Q3 GDP rate, which is widely expected to land below a 2% annualized rate of growth, far below job creation levels and far too low to lift Democrats on the campaign trail.