EMPLOYMENT
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Drip, drip, drip
As a holiday devoted to American workers is at hand, the outlook for employment is somewhat disturbing.
Manufacturing is in the midst of a lengthy slump, and industrial layoffs have become the norm.
In the cash-starved high-technology and telecommunications industries, orders have fallen sharply, also leading to worker cutbacks.
In much of the economy, though, the need for employees remains robust.
Anything related to construction and the booming housing industry continues to draw in workers, while there is little letup in services, retailing and health care.
But don’t be surprised if Friday’s August employment report shows a slight uptick in joblessness, to 4.6 percent from 4.5 percent in July, with payrolls declining by about 10,000 positions.
That’s the less-than-rosy prediction of Chicago economist Robert Dederick, who says “the economy remains stalled.”
Dederick, a consultant to Northern Trust Corp., said that “while there is no deluge of firings taking place, there clearly is leakage in the job market.”
He said some people are finding it takes longer to find a new position.
On the bright side, Dederick said the economy “continues to ward off a full-blown recession.
“According to such signs as the leading economic indicators, we should be seeing some evidence of improvement. Unfortunately, there is no sign of a turnaround yet,” he added.
AUTO SALES
Brake lights
Although manufacturing generally is in a funk, one area that has avoided skidding into the ditch is the auto industry. Both the Big 3 automakers and Japanese manufacturers producing cars on this side of the Pacific have watched sales hold at levels not far below records.
But analysts believe consumers tapped the brakes on buying fresh metal last month. Accordingly, this week’s totals for August car and light-truck sales are likely to show evidence of deceleration, despite heavy incentives.
Industry analysts believe sales for August will run just ahead of an annual sales rate of 16 million vehicles, down from 17.1 million a year earlier and 16.6 million in July.
Even so, carmakers are counting on total sales this year of about 16.5 million vehicles, the third-highest total ever.
On Tuesday, watch for another measure of manufacturing with the August survey results from the National Association of Purchasing Management. Economists expect only a modest advance from July’s 43.6 reading; any reading below 50 is seen as a sign that manufacturing is in decline.
RETAILERS
Rebate index
While Washington has been sending out tax rebate checks to millions of American households, the nation’s retailers still are singing the blues about a lack of enthusiasm among consumers.
Whether the government checks are beginning to fuel shopping sprees will be evident Thursday, when discount and department store chains report August sales totals, including the critical category of back-to-school purchases.
Most analysts anticipate a rise of about 3 percent from year-earlier figures.
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If the numbers come in muddled or surprisingly weak, retailers may show a reluctance to order heavily for the coming holiday season.
EQUITIES
Beached
Stock, bond and commodities, options and futures markets are closed Monday for Labor Day, along with government offices.
The weekly auction of short-term Treasury bills will take place Tuesday.
Meanwhile, investors and dealers returning from vacations at the beach will find Wall Street shellshocked from a late-summer selling barrage.
A chief concern is that the meltdown of markets isn’t confined to this country.
Last week, stocks in Tokyo fell to a 17-year low amid fears that stiff new accounting rules will force some Japanese banks into insolvency before the end of this month.