WASHINGTON — For the first time in months, a host of indicators are pointing to an improving labor market ahead of the monthly jobs report from the government. The latest report from the Labor Department, coming Friday, is likely to cement the view that the U.S. economy is clear of another recession.
Gauges of manufacturing activity, private-sector hiring and first-time unemployment claims all showed improvement for September, providing more ammunition for those economists who think the glass is still half full for the U.S. economy.
“The next recession hasn’t started yet. It certainly didn’t start in September, based on the latest available batch of economic indicators,” Ed Yardeni, a veteran Wall Street analyst, wrote in a research note Thursday. “Most encouraging is that private-sector payrolls rose 91,000 during the month, according to ADP.”
The ADP National Employment Report, which gauges only hiring in the private sector, came in above analysts’ expectations Wednesday and pointed to improved hiring after a scary summer. The number is still below the levels that are needed to significantly knock down August’s 9.1 percent unemployment rate, but it beats the tepid summer numbers, which prompted analysts’ concerns about a double-dip recession.
Also pointing to continued hiring was Thursday’s Labor Department report on first-time unemployment claims. These applications for jobless benefits rose by 6,000 to 401,000 last week, but that was less than had been forecast. Importantly, the four-week average for this number continued to fall; it’s now at 414,000. That’s still above the average of 375,000 jobless claims that economists say reflects a healthier job market.
Most mainstream economists have forecast a September government jobs report that’s positive, in the range of 25,000 to 90,000 jobs. The monthly report from the Bureau of Labor Statistics includes state and local hiring, which has been negative throughout 2011 and pulls against stronger overall employment numbers.
While there’s been more to cheer about of late, another measure points to future pain. The outplacement company Challenger Gray & Christmas Inc. said Wednesday in its monthly report on planned job cuts that employers had announced 115,730 layoffs in September. That was the worst job-cut month in more than two years, the firm said.
“Heavy reductions planned by the military accounted for a large portion of September job cuts, signaling what may lie ahead as the federal government seeks across-the-board cuts in spending,” Challenger Gray & Christmas noted, adding that the other big hit came from Bank of America’s planned layoffs.
On another positive front, the International Council of Shopping Centers reported Thursday that revenues for its members were up 5.5 percent in September, a big jump over the revised August number of 4.8 percent. That points to more hiring in the retail sector.
Big retailers such as Target and Kohl’s did particularly well, as did both discount and luxury stores.
“The discount stores’ performance is understandable; however, it is very hard to understand the luxury department stores doing well in this economic and financial environment. Consumer confidence is at recession levels, household net worth is projected to fall considerably, job prospects are dismal and household income is hurting,” Chris Christopher, an economist with IHS Global Insight, wrote in a research note. “This report is sending a somewhat confused signal on the state of the American consumer.”