ADP Numbers Give Investors Some Hope – But Will They Last
Automatic Data Processing releases its own “employment report” just before the official government numbers are released. This month, ADP shows that only 491,000 jobs were lost in the month of April, that’s a considerable increase over the month prior.
Predicting future employment reports is like picking the powerball. There are 300 million people who reside in the United States with many millions of them small business owners or employers of some kind. Its practically impossible for the average person to through out a number and see if millions of independent actions can live up to it.
However, we can look at what is happening now and try to find a decent center ground for the future of employment. Let’s see, GM is bankrupt, Chrysler isn’t much better, and both are closing down a great number of dealerships. And GM alone is closing 1700 dealerships, by my research that’s anywhere from 50-70,000 jobs.
That’s not very much in the grand scheme of things. Big business has already started cutting back, I don’t foresee any larger cuts from the big corporations. But what I do expect is a small business shakeout.
Small businesses are getting whacked right now. And unfortunately for the economy, small businesses are generally less efficient with less productivity coming from each new hire. Small businesses are inefficient and hire more people to do less than the average large corporation.
Small businesses are going to start feeling the pinch. As a whole, small businesses rely on the consumption of their products by larger businesses and from the consumer. Well, consumers have already gotten their own shakeout in the form of job losses and big business is losing its shirt just trying to stay open.
As time goes on its only going to get worse for small businesses that hire 70% of the workforce. Big business cuts aren’t making headlines any more, but those numbers are easy eclipsed by the small business reductions.
I’m not putting much faith in one employment report and I expect that you won’t either. Remember, for as long as jobs are disappearing, the economy is getting that much worse.
