Denninger: ADP Payroll - Ugh

08-05-2009 • Market-ticker.denninger.net

 While the rate of decline has slowed the fact remains that we are nowhere near "turning the corner" in terms of job loss, and yet the mantra is "green shoots, green shoots!" Note that while goods-producing layoffs have dropped materially, the services side of the economy has basically flat-lined. That is, the goods-producers have drawn down inventory (a cycle that may be nearing completion) and as such their need to lay off people has waned - however, the services side is still seeing contracting demand and that contraction appears to have flat-lined from May going forward instead of continuing to improve in June and July. Continuing contraction in the services portion of the economy is not positive no matter how you slice it, and the improvement from the January and February time frames for services appears to have stalled in June and July.

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