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Strategies & Market Trends : Can you beat 50% per month? -- Ignore unavailable to you. Want to Upgrade?

To: Secret_Agent_Man who wrote (11666)	9/5/2007 9:08:31 AM
From: Smiling Bob	Read Replies (1) \| Respond to of 19256

Some rationality returning today. Wouldn't it be nice if stream of coming news ahead of FOMC is so bearish that WS actually realizes a Fed cut won't cut it. I'm wondering if ADP news will be spun bullish, or if WS may finally concede that recession is looming and S&P is cheap for good reason. --- DP Employer Services Says U.S. Added 38,000 Jobs (Update3) By Shobhana Chandra Sept. 5 (Bloomberg) -- Companies in the U.S. added the fewest jobs in August since June 2003, a private report based on payroll data showed today. The 38,000 increase was less than forecast and followed a revised gain of 41,000 for the prior month that was smaller than previously estimated, ADP Employer Services said. Hiring may weaken as the prolonged housing slump and higher credit costs take a toll on growth, economists said. A cooler job market will open the door for Federal Reserve policy makers to lower their interest rate target to stimulate the economy. Economists at Lehman Brothers Holdings Inc. were among those that reduced their August payroll forecast following the report. ``This is another in a series of reports pointing to a softer labor market,'' said John Shin, an economist at Lehman Brothers in New York. ``It's the real effect from the drop in housing. The Fed needs to cut rates, and we think they will.'' Lehman lowered their payroll estimate to 80,000 for August from 95,000. The Labor Department's report, due in two days, may show payrolls rose by 108,000 in August and unemployment held near a six-year low, according to the median forecast in a Bloomberg News survey taken before today's ADP release. The ADP report was forecast to show an increase of 80,000, according to the median estimate of 21 economists surveyed by Bloomberg News. Estimates ranged from 40,000 to 110,000. Yields Drop U.S. Treasury securities extended gains after the report. The yield on the benchmark 10-year note fell to 4.52 percent at 8:49 a.m. in New York from 4.55 percent later yesterday. Economists were more upbeat about the Labor Department report due on Sept. 7, which may show the economy added more jobs in August after a 92,000 gain in July. The unemployment rate probably held at 4.6 percent for a second month, according to the Bloomberg survey median. The jobless rate reached 4.4 percent in March and October, the lowest since 2001. ADP includes only private employment and does not take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP. ADP's projection for July fell well short of the official Labor Department estimate last month. Private payrolls rose by 120,000, three times the ADP forecast. Factories, Builders Today's report showed a decrease of 49,000 jobs in goods- producing industries which include manufacturers and construction companies. Service providers added 87,000 workers to payrolls. Companies employing more than 499 workers reduced their workforce by 32,000 workers in August. Medium-sized businesses, with 50 to 499 employees, added 26,000 jobs and small companies increased payrolls by 44,000. The ADP report is based on data from 383,000 businesses with about 23 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006. The company says there is a 90 percent correlation between its revised data and the government's monthly private jobs figures. Growth in employment has so far prevented consumer spending, which accounts for more than two-thirds of the economy, from contracting even as it's slowed. Spending in the first half of the year rose at an average 2.6 percent annual pace, a percentage point less than the quarterly average over the last decade. Federal Reserve Chairman Ben S. Bernanke last month said the central bank would do what's needed to prevent the credit- market rout from jeopardizing the six-year expansion. Earlier in August, policy makers acknowledged that the risks to growth have risen ``appreciably.'' Some economists predict housing-related businesses will step up firings. First American Corp., the largest U.S. title insurer, yesterday said it will cut 1,300 jobs this quarter, or about 3 percent of its staff, in addition to the 600 jobs it slashed in the second quarter. To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net Last Updated: September 5, 2007 08:50 EDT