Wall Street readies itself for another dismal jobs report
The BLS will release its montly unemployment report and and indications are it will be another downer.
The private sector created 91,000 jobs from July to August, a shade below expectations, according to a report from ADP that sets the stage for a likely weak report on nonfarm jobs the government will release Friday.
ADP and Macroeconomic Advisors said service-sector jobs rose 80,000, down from an average increase of 115,000 over the past two months, while the goods-producing sector saw a gain of just 11,000.
Consensus estimates are that the government will show the economy created about 80,000 jobs overall in August-including the public sector-though some economists say the report actually could show a loss of jobs.
The ADP report showed that June's estimate of 114,000 jobs created was revised down to 109,000.
Despite the tepid pace of job growth, which is well below the amount needed to reduce the 9.1 percent unemployment rate, Joel Prakken, chairman of Macroeconomic Advisors, said the economy probably isn't in recession.
"Our best recession probability models say that the likelihood that we're actually in a recession right now is actually very, very small," Prakken told CNBC.
At this point, I don't think the technical definitions of whether we're in a recession or not matter very much. This is now a political calculation by the American people and minuscule changes up or down in the unemployment rate, or revised growth figures showing an economy barely moving at 1%, will have little effect on the average citizen.
All they know is in their neck of the woods, jobs are nearly non-existent and new economic activitiy isn't happening. Little or no business creation means few jobs being created, as does the stifling of business expansion by overregulation and new investment because of fears that higher taxes are on the way.
It will be interesting next Thursday evening to see if the start of the NFL regular season featuring two exciting teams - the Saints and the Packers - out draws Obama's jobs speech.
My guess is the American people have already tuned Obama out and will go for the escapism of the game.