While the Challenger Feb. job cuts report appeared to be slightly better than the previous month's, a couple of things stood out which supported what we mentioned earlier this week.
First, the YTD pace of job cuts is running at 18% more than last year's. 105,214 jobs have been cut this year compared to 89,221 same time last year. Another 25.6K job cuts in March, which is only 62% of job cuts announced in March '11, and this year's Q1 job cuts will be higher than last year's, keeping this recovery a modest one at best.
Second, unlike last year, most of this year's cuts have been in the consumer products and transportation sectors, indicating the negative impact of higher oil prices which also drive gasoline prices higher. According to the report, "Both sectors are undoubtedly feeling the impact of rising fuel prices as heavy users of fuel, but also from their dependency on consumers, who are being forced to spend more on gasoline and less on the products and services provided by these firms." And believe it or not, Feb. figures would have looked worse were it not for the 'recovery' in government jobs (most states and local). Again, this recovery is a modest one at best.
Initial Jobless Claims (3/3/12)
Seasonally adjusted figure came in above expectations, 362K vs. 351K, which is not good news. It was also higher than the previous week's figure, which itself was revised higher by 3K to 354K. Although seasonally adjusted initial claims have been below 400K in 8 out of the last 9 weeks, they have not gone below 350K in 4 years! In addition, we note that the seasonal factor applied to the raw figure was the highest for the first week of March since 1995!
For this reason, we believe it is also important to look at the raw, or non-seasonally adjusted number, which was approx. 365.8K, up 31K+ from the previous week.
The, what we believe to be bad news, is partially offset by yesterday's inline ADP private payroll number of 216K. Then again, those ADP figures get revised more than even the government employment-related numbers.
We will provide more thoughts on tomorrow's expected BLS employment figures later today.