Jobs

Jobs Data Calls for Massive Employment Gains in December (CTAS, PAYX, ADP, MAN)

ADP is out with its pre-unemployment and payrolls figure with its guess for what happened on the jobs front in December.  ADP is often not on target, but the number shows a forecast for a monster number in gains.  ADP is predicting that new jobs in December grew by a whopping 297,000.  Dow Jones was calling for a mere 100,000.  More data from Challenger and from TrimTabs shows gains as well, but a bit less robust.

Some companies to watch around the jobs data are Cintas Corporation (NASDAQ: CTAS), Paychex Inc. (NASDAQ: PAYX), Automatic Data Processing, Inc. (NYSE: ADP), and Manpower Inc. (NYSE: MAN).  So far the market is taking a wait and see attitude, but if there is going to be a major employment turn then those are some of the go-to names to watch.

The Challenger Job-Cut Report showed earlier this morning that fewer layoffs are being announced and noted, “in fact the fewest since June 2000 according to Challenger’s count which fell to 32,004 in December vs November’s 48,711.”

Another piece of data came out this morning from TrimTabs Investment Research.  TrimTabs projected that the economy added 135,000 jobs in December. That would be the third consecutive month of job growth.  TrimTabs noted on a longer-term basis that its believes the economy will “remain in a slow growth mode as the expiration of the “Making Worth Pay” tax credit and rising gas prices will offset the stimulus of the payroll tax cut.”

All of this acts as a preliminary jobless claims prediction (due Thursday) and acts a prediction mechanism for predicting unemployment and non-farm payrolls data due on Friday.

Bloomberg has estimates of 412,000 in weekly jobless claims due Thursday versus a preliminary figure last week of 388,000.  Bloomberg also has Friday’s figures on unemployment projected to be 9.7% (versus 9.8% in November) and it has December’s non-farm payrolls figures projected as being 140,000 (against 39,000 in November).

ADP is often off the mark and many feel that the data is incomplete and skewed in any given month.  That being said, this number was so large and so much above estimates that economists are probably changing their estimates now for an even better jobs picture in payrolls and for weekly jobless claims.

This number almost sounds too good to be true.  Now the catch is the pundits questioning whether or not it can be repeated in light of all the retail and temporary workers that will be let go in January after the holidays.

JON C. OGG

JON C. OGG