The first Friday of every month is one of the key economic readings for the economy, and that comes in the form of the monthly unemployment report and non-farm payrolls creation.  Tomorrow we will get the reading for December 2007.  As the US economy is hovering in limbo between a slowdown or a recession, you can imagine traders are looking for a glimpse of any data they can get their hands on ahead of this number.  Sometimes traders follow the Monster Employment Index, and sometimes not.

Those looking for additional softness in jobs on Friday have one more piece of ammo for their argument.  The Monster Employment Index declined in December by 14 points to 169, which is the worst reading since 168 in January 2007 and 167 in December 2006.  The index has shown a historic seasonal slowdown every December since its creation in 2004 followed by a rapid expansion in the following months.  The problem is that 2004 to 2006 were expanding economies, and the economy isn’t in as good of shape this time.

When you read the summary comments it will seem even worse: Lower demand for office and administration workers in December suggests slower corporate expansion may lie ahead; Unusual drop in demand for sales opportunities indicates retailers are still cautious about hiring amid an uncertain holiday shopping season; Online demand within the financial sector remains muted; Government and healthcare are still key areas of strength; nearly all of the 20 industries and 23 occupational categories tracked by the Index registered lower online job availability compared to the previous month; Online job availability declined in all 9 U.S. Census Bureau regions in December with California, Florida, and Arizona having the sharpest declines; office and administrative support and also sales jobs posted sharp declines, indicating a cautious hiring after an uncertain holiday environment.

Approximately half of the decline is attributed to seasonality as employers naturally scale back their hiring activities during the final month of the year.  Only two industries didn’t report drops, although they were unchanged from November: public administration (with military); Agriculture, forestry, fishing, hunting.

Monster Worldwide (NASDAQ: MNST) of course uses its job boards as it is the largest, but it also uses online job boards for a real-time review of millions of opportunities from other job boards and corporate career sites.  The seasonality is always something one can point to as cause, but this is one piece of data that sure points toward weak jobs numbers measured by the private sector regardless of what the government data says on Friday (particularly since their computers seem to never get it right).

The Challenger report on December job cuts is out at 7:30 A.M. EST, the ADP December employment report is at 8:15 A.M. EST and the Labor Department’s weekly jobless claims is at 8:30 A.M. EST.  After the worst stock market drop for a new year’s opening day in decades, this weak reading might get more attention than in the past.

Jon C. Ogg
January 3, 2008

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