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Unemployed father of two, Michael Lopez waits for work outside a temporary labor office in the Southern Californian town of El Centro, a town of 50,000 people where 30.4 percent of the work-age population are without employment, on October 28, 2010.
I can't call this anything other that pure intuition, but I think tomorrow's December 2011 jobs report from the Bureau of Labor Statistics is going to be very, very surprising. It's going to show many more jobs added and potentially knock another tenth of the percentage point off the national unemployment number, currently at 8.6 percent.
I could be completely wrong of course. We could end up with just north of 100,000 jobs adding in December, closer to the economic consensus and well below the 350,00-per-month figure we need to see the unemployment crisis begin to resolve.
I'm going on feeling, but the rest to the world can look to the ADP report, which provides a preview of the official BLS data. It hasn't been terribly reliable of late. And as the Wall Street Journal points out, its average December miss since 2006 has been...122,000 jobs.
ADP's December data says the economy added a whopping 325,000 new jobs. Everyone is pointing out that you have to look at that in a seasonal context. The holiday rush compels employers to add workers in December.
But let's say that ADP has lived up to its reputation and overshot by 122,000. That still means 203,000 jobs added in December, a reasonable improvement over the BLS November 2011 figure of 120,000.
It's also important to view the jobs picture in the context of growth in US GDP. That number has been fairly bad all year, meaning that economy isn't productive enough to drive down unemployment. But forecasts for the fourth quarter are largely being revised up, into the 3-plus-percent range. That's not what you would expect coming out a severe recession — 5-6 percent would be more like it — but anything above 3 percent would be consistent with more robust hiring, monthly jobs numbers in the 250,00-350,000-ish balllpark, and initial jobless claims falling consistenly below the critical 400,000 per month number that would signal the beginning of the end of our long national unemployment nightmare.
The wrench in the works is the markets. They're not exactly taking off on the ADP news — in fact, right now the Dow is down slightly. But that could be as much about continued worries in Europe as any skepticism over jobs.
Like I said, it's a feeling. But this time around, I think ADP may be more right than wrong. Tomorrow will tell.