The ADP Employment report was released this morning, showing a dismal reading of 79,000 jobs lost last month, the biggest loss since November 2002. Job gains reported for May were also revised lower. After adding in an estimated 20,000 government jobs created in a typical month but not included in ADP’s read, their report suggests that about 60,000 jobs were lost in June…inline with estimates for tomorrow’s official Jobs Report from the Department of Labor. Initially Mortgage Bonds traded higher on the negative news, but have since come off their highs.
Oil and food prices are soaring…so consumers have to make hard choices as to where they spend their money, as so much is now going to the necessities of gas and groceries. Look no further than yesterday when Starbucks announced it is going to close 600 stores - about 15% of their US stores overall, which is a clear indicator that consumers are putting their double latte money right in the gas tank. This event and others like it will put a lot of people on the unemployment line.
