Evidence of Poor Jobs Report Mounts

The body of evidence that the July jobs report will show an addition of fewer than 100,000 has grown recently. ADP released its data, which said the private sector added 163,000 positions. That, coupled with the overall malaise of the economy, makes it more likely that July’s numbers will be as bad as those from June and May. New research from Gallup affirms the worry that the employment market continues to weaken.

Gallup’s U.S. Job Creation Index slipped to +17 in July, after registering at or near +20 from April through June. Gallup’s experts wrote:

The Gallup Job Creation Index is a measure of U.S. adult employees’ perceptions of hiring conditions where they work. On average in July, 34% of all full- and part-time workers said their employers are hiring and expanding the size of their workforces, and 17% said their employers are letting workers go and reducing the size of their workforces, resulting in the +17 net hiring figure.

The worst sector among those measured by Gallup was public employees, which should be no surprise. Austerity and budget deficits continue to undermine the ability of government at all levels to retain the work forces they had four years ago. Gallup’s data demonstrate that federal and municipal workers were particularly hard hit recently.

The government’s monthly jobs report has confirmed the trend of public worker layoffs. This trend may be as important as any other as the second part of the year begins. Almost every day brings more news about states and cities that have to cut workers to close deficits and cover pension funding. The battle over federal expenses eventually may drive up sharp job cuts at that level as well.

The jobs market has not come near escape velocity, and there is no reason to believe that will change in 2012.

Methodology: Results are based on telephone interviews conducted as part of Gallup Daily tracking July 1 to 31, 2012, with a random sample of 16,314 employed adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.

Douglas A. McIntyre