TrimTabs Investment Research, a research firm in Sausalito, Calif., takes a dimmer view on the upcoming U.S. jobs report, which is scheduled for Friday. Not only that, but TrimTabs says the job market was even worse than it appeared in the first half of the year.
TrimTabs says the U.S. economy probably lost 488,000 jobs in July. And it gets worse: based on unemployment insurance survey results, TrimTabs also expects the U.S. Bureau of Labor Statistics to revise its job loss estimates sharply higher for the first half of the year.
"While Wall Street is convinced the recession is over, the economy continues to shed jobs at an alarming rate," said Charles Biderman, CEO of TrimTabs.
TrimTabs says its "employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from all salaried U.S. employees."
Here's more from TrimTabs:
As job losses have continued at a rapid clip, declines in wages and salaries have accelerated. According to TrimTabs' tax data, wages and salaries fell 5.9% year-over-year in July, worse than the decline of 5.1% year-over-year in the second quarter.
"The personal income report the Bureau of Economic Analysis released Tuesday contained huge downward revisions to wage and salary growth," said Biderman. "Now that the BEA is using unemployment insurance reports from the first quarter to estimate current wage and salary growth, its data confirms what we have been reporting for months."
The BEA's estimates of wages and salary growth changed from year-over-year declines of 0.8% in April and 1.1% in May to year-over-year declines of 4.0% in April and 4.2% in May. Also, the BEA reported that wages and salaries dropped even more sharply in June, falling 4.7% year-over-year.
"Two months ago, we asked BEA economists how they reconciled the huge declines in real-time tax deposits with their report of a modest decline in wages and salaries," said Biderman. "They could not answer our question. We know now that by ignoring real-time data, the BEA was providing an inaccurate view of the economy's health."
This is going to be a very interesting report that is going to be coming out on Friday. I suspect that the green shoots that everyone feels is present will not materialize at least this quarter. Hence the weak ADP numbers reported this morning. Cisco Systems also reported that they laid off more then expected workers this past quarter. There is not enough demand to drive revenue for the private sector right now.