The American job market remains a global wonder, its status seemingly invulnerable month after month. Each month brings reports of heavy demand for workers, as well as lamentations about the difficult situation facing hapless employers. Yet recent news reports seem to suggest the job market may not be all that tight after all. In August, joblessness actually inched higher, to 4.1 percent. Watch Friday’s employment report for September to show that “the labor market has cooled a bit, even though no ice has formed.” That’s the prediction of Chicago economist Robert Dederick, who looks for the unemployment rate to hold steady, while payrolls grow by 225,000 positions. Dederick, of Northern Trust Corp., said that without such factors as the end of a big strike at Verizon Communications and layoffs of census workers, the expansion of jobs would have amounted to only about 150,000 positions. Overall, he said, the jobs report “will be nothing to sneer at. However, it will add to evidence that demand in the economy no longer is racing ahead, as it was earlier this year.”
FEDERAL RESERVE
STEADY AS THEY GO
Although Tuesday’s meeting of Federal Reserve policymakers is unlikely to generate much news–and certainly not an increase in short-term interest rates–the session may not lack for fireworks. Fed members are growing increasingly concerned about consumers’ high levels of debt, and the dangers that any upcoming defaults could pose to the nation’s banking system. Less than two weeks ago, the Federal Deposit Insurance Corp. reported that banks’ return on assets, a basic measure of their profitability, has fallen to the lowest point since 1992.
CAR SALES
CONSUMERS GETTING WEARY
Plenty of attention will be paid to this week’s reports on September car and light truck sales in light of last week’s dismal news that Chrysler is expecting a loss topping $500 million in the current quarter. Economist Richard DeKaser believes the auto industry is facing a chilly winter. “Consumers are tapped out, and the market for motor vehicles is largely saturated,” said DeKaser, of National City Corp. in Cleveland. He said vehicle ownership is at an all-time high, with 2.2 cars or trucks per family. As a result, he said, “the industry has found it necessary to `buy’ additional sales with huge, costly incentives.” DeKaser said the sales trend for Detroit will remain troubling until early next year. Other reports due out this week: August new home sales Tuesday, the month’s leading economic indicators, also Tuesday and factory orders Wednesday. Keep an eye on home sales, which showed an unexpected leap for July. Analysts are expecting a dip of 5 percent or more.
EQUITIES
EARNINGS CHALLENGE
The stock market limped into the end of the third quarter amid repetitive jitters over corporate profits. Friday’s disaster du jour came from Apple Computer, which had forecast a deep shortfall–trimming its stock price roughly in half. The question for Wall Street as October dawns is whether corporations can impress investors and regain their confidence over the next two weeks as confessions and warnings come to an end and the actual quarterly profit numbers roll out.