Jeremy Hobson: As the U.S. wakes up from holiday celebrations, the rest of the world is busy trying to stimulate a struggling economy. Central banks in Europe and China announced this morning they are cutting interest rates to spur lending. And the Bank of England announced this morning it is pumping another $78 billion into the economy.
All that ahead of the most important economic indicator of the month here in the U.S., which comes out tomorrow: the June employment report from the Labor Department.
Marketplace’s Mitchell Hartman tells us about some early clues that came in this morning.
Mitchell Hartman: First, layoffs. They hit a 13-month low in June.
John Challenger of outplacement firm Challenger Grey & Christmas says employers aren’t hiring very much, but they’re not firing a lot either.
John Challenger: And we’ve moved into a period where the economy is in kind of this slow growth mode, and employers are just standing pat.
Next, on to job creation. ADP, which tracks private payrolls, said this morning that companies added 176,000 new positions in June. That’s more than economists expected.
But Nariman Behravesh at IHS Global Insight is sticking with his lowball prediction for the Labor Department’s big unemployment report tomorrow.
Nariman Behravesh: We think it’s going to be stuck at 8.2 percent. I wouldn’t be surprised to see it drift up a little in the coming months. That’s consistent with a lackluster job situation. And if it goes down it’ll be typically for a bad reason in this environment, which is people dropping out of the labor force as they stop looking for work.
In the past three months, the U.S. economy has not created enough jobs to keep up with new workers entering the labor force.
I’m Mitchell Hartman for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.