Wednesday, August 5, 2009

Follow-up on ADP Report...

One item that I haven't heard a lot about from media pundits is the number of eliminated jobs in the small business sector and the correlation to the increase in the minimum wage. ADP recognizes this group as companies who employ fewer than 50 workers. For June, small businesses loss 177,000 July, the figure was 138,000. But, at the end of July, the minimum wage was increased from $6.55 to $7.25, and the fear was this action may cause a jump in layoffs in the small business sector. Well, the evidence is there that not as many jobs were cut (still, tho, -138,000 is horrible), but the near fear is this group will not be hiring due to increase labor costs.

Another bothersome data point was the amount of jobs eliminated in the financial services sector in July: -26,000. The sector dropped 29,000 jobs in June, but July shouldn't have been as dire as it was--especially since the equity markets rallied 8%+ for the month.

This is a concern and one I'll be keeping a close eye on.

Todd M. Schoenberger

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