The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

ADP said there were 371k private sector jobs shed in July, 21k more than expected but it’s the slowest pace of decline since Oct ’08. As has been seen, small and medium sized businesses led the way. The goods producing sector shed 169k jobs, 99k of which was manufacturing. The service providing sector lost 202k jobs. “Construction employment dropped 64k. This was its 30th consecutive monthly decline, and brings the total decline in construction jobs since the peak in Jan ’07 to 1.483mm. Employment in the financial services sector dropped 26k, the 20th consecutive monthly decline.” Overall, I can’t quantify the impact that seasonal changes had in the auto sector where the typical July plant shutdowns didn’t happen. Friday’s payroll number is expected to drop by 328k. Bottom line, for now the economy has bottomed and will improve in the 2nd half but I repeat that the degree and sustainability of the recovery still comes down to the health of the consumer.